The slated $1.6 billion marriage of oOh!media and APN Outdoor has ruffled a few feathers in the outdoor advertising market, as competitors and media buyers work through its implications.
There is some angst over the transaction and sources told Street Talk the Australian Competition and Consumer Commission was looking at scheduling face-to-face meetings soon on the deal and extending its own timeline for deliberations.
The regulator has said March 9 is the proposed date for either a decision or statement of issues, but that was complicated by the fact the period to prepare submissions spanned the Christmas shut down.
Industry players and interested parties have raised several concerns in their submissions to the ACCC on the merger.
Those canvassed by this column said the combined entity would have a stranglehold on markets including Sydney and its airports where it is difficult to attain permits for signs.
Some of the concern centres on oOh!media and APN bundling products together which could further close out competition.
oOh!media and APN estimate their combined businesses will account for close to 55 per cent of the outdoor advertising market (known in the industry as out-of-home advertising) and around 2.5 per cent of the overall advertising market in Australia.
While the parties involved are arguing they compete with a broad mix of players in the advertising market, including giants like Facebook, it remains to be seen whether the ACCC will buy that argument.
Analysts at CCZ Equities last month told clients the ACCC may not approve the merger, although if it did the deal may be subject to a spill of contracts to competitors.
Those contracts could be worth $51.2 million of earnings before interest, tax, depreciation and amortisation, according to CCZ.
Last time the ACCC considered this issue in detail was about five years ago. That was when oOh!media was acquiring EYE Corp, a deal which got the green light.
At the time the ACCC assessed competition in two key markets, not the broader advertising market.
They included the national market for supply of out of home advertising services and the market for acquiring of out of home advertising sites.
Out-of-home advertising has been one of the few areas of growth in Australia.
