ACCC approves acquisitions of Adshel and APN Outdoor Group

Consumer watchdog says both acquisitions are complementary in the out-of-home advertising space, in contrast to its former concerns about an oOh!media/APN tie-up

The Australian Competition and Consumer Commission (ACCC) has given the green light to both oOh!media’s acquisition of Adshel, and JCDecaux SA's acquisition of APN Outdoor Groupin the out-of-home advertising sector, arguing the two do not lessen market competition.

The two deals were announced in June amid a flurry of merger and acquisitions activity that saw rivals striving to outbid and outplay each other in order to secure a larger slice of Australia’s outgrowing -of-home advertising revenue.

JCDecaux was the first to secure its purchase, with a $1.09 billion bid for the APN Outdoor Group on 21 June. The deal was conditional on APN dropping its bid for fellow OOH player, Adshel, which had been lodged in May, just days after oOh!media placed its own $470 million bid in for the latter business.

It was oOh!media that eventually came up trumps on Adshel, concluding the bidding war with a $570 million offer for the HIT&E subsidiary on 25 June.

In a statement, ACCC chair, Rod Sims, said both transactions were mostly complementary in terms of growing out-of-home reach.

“This is very different to the proposed tie-up in early 2017 between oOh!media and APN Outdoor, where the companies were in direct competition with each other,” he stated.

At the time, the ACCC raised significant concerns about a oOh!media/APN merger, stating this would create a market leader with more than 50 per cent of all OOH advertising and even higher percentages of ownership across segments such as roadside billboards. Before releasing its final decision, however, the merger was abandoned.

The latest two cases, however, are unopposed. The consumer watchdog noted APN’s strengths lies in large format billboards and airports, while JCDecaux operates street furniture. In a similar vein, oOh!media’s heritage has been large-format billboards, airport and retail categories, against Adshel’s street furniture focus.

 “The information before us, including bidding data for sites, indicates that the respective merger parties rarely compete head-to-head,” Sims continued.

“Some market participants expressed some concerns, in particular about the possible anti-competitive bundling of different out-of-home categories. However, the major media agencies and large advertisers did not generally express strong concerns, and the ACCC considers that bundling is unlikely to have a significant impact on competition.

“The merged companies will continue to compete with each other and with other out-of-home advertising providers. We consider that the options for advertisers and site owners will not change significantly and so neither of the proposed deals is likely to substantially lessen competition.”  

CEO of oOh!media, Brendon Cook, welcomed the news and claimed the acquisition of Adshel was an important turning point for competition in the local OOH market.

“For oOh!media, the acquisition of Adshel will add a missing piece to our diverse out-of-home portfolio, by adding a national street furniture and transit offering,” he said.

The news comes in the same week as APN and oOh!media reported their half-yearly financials results to the Australian Stock Exchange.

APN reported a 9 per cent rise in first-half revenue year-on-year based on ‘rebased growth’ to $168.4 million, with underlying EBITDA up 17 per cent to $39.7 million. Statutory net profit using rebased growth also increased 33 per cent to $17.8 million.

Among the contributors to the result were a 10 per cent rise in billboards revenue to $92.9 million for the first half, plus 18 per cent growth in digital sales to $71 million. APN now has 134 large-format digital panels across A/NZ.

APN has also just secured a further extension of its long-term contract with Sydney Airport, a deal that sees it taking over internal and external OOH sites at Qantas’ T3 Terminal along with Terminals 1 and 2 until 2025.

Ooh!media, meanwhile, reporting double-digit revenue growth for the half-year to 30 June 2018, up 11 per cent year-on-year to $192 million. Gross profits were $87.6 million, again up 16 per cent compared to H1 2017, reflecting a 2 per cent gross profit margins to 46 per cent.  A key highlight was 16 per cent sales growth in road products.

The group said it now maintains 8000 digital panels across A/NZ, 12,000 classic panels and eight online platforms. One of its biggest initiatives right now is building an ‘organisational transformation platform’ that will enable clients to plan, buy and place campaigns across both types of inventory.

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, join us on Facebook: https://www.facebook.com/CMOAustralia, or check us out on Google+:google.com/+CmoAu 

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments

Blog Posts

How service heterogeneity is impacting engagement

Marketers have long known the importance of standardising products to assure quality and consistency. For services, however, standardisation is much more complex.

Dr Chris Baumann

Associate professor, Macquarie University

Kindness matters in business: why the nice guys finish first

A recent 1000-page Royal Commission report on misconduct in Australia’s financial sector revealed hair-raising stories of excessive commissions, rampant mis-selling and charges levied on the dead. So how do you stop a bank from misleading its customers?

Nick Liddell

Director of Consulting, The Clearing

Myer vs. David Jones: Do cyborgs win?

As two of Australia’s stalwart brands in Myer and David Jones continue their respective journeys through troubled waters, it heralds yet another sign of the shifting business environment and shift towards an experience economy.

Tom Uhlhorn

Founder and strategy director, Tiny CX

International business is closely related to marketing or marketing activities carried out by the company. According to Gitman and McDani...

Eko Prasetyo Utomo X

Salesforce: The age of the marketing campaign is over

Read more

Back in 1968 Holden began an appeal to customers who have an interest in competition. It did this with the introduction of the HK GTS 32...

Ben Tate

Marketing professor: For Holden, brand nostalgia ain’t what it used to be

Read more

Your blog post is really good and informative. Thanks for taking time to provide us this useful information with us.Auto wrapping uaeADF ...

Yes Machinery

Image intelligence:10 must-see infographics for marketers

Read more

A debt of gratitude is in order for sharing this marvelous information.I have taken in numerous things from your post

digitech Classes

Lumen CMO strives to make the brand synonymous with anti-ageism

Read more

Commercial.

Djordje Milutinovich

​Understanding customer experience from the inside out

Read more

Latest Podcast

More podcasts

Sign in