ACCC clears Seven, Southern Cross deal.

“We found that Southern Cross and Seven attract different advertisers and are not close competitors,” says ACCC.

The Australian Competition and Consumer Commission will not oppose the proposed acquisition of Seven West Media Limited by Southern Cross Media Limited.

Seven owns and operates free-to-air TV broadcaster the Seven Network, as well as the publishers of The West Australian, the Sunday Times, 11 suburban newspapers and 19 regional publications in Western Australia. Seven does not own any radio licences or assets.

Southern Cross operates 104 FM, AM and digital commercial radio stations through the Triple M and HIT brands and holds 88 radio licences in metropolitan areas and regional areas of Australia. Southern Cross also produces over 800 podcasts, 50 music stations and live sports coverage, but does not publish any newspapers or own any TV licences or assets.

The ACCC’s review considered how closely Seven and Southern Cross compete across different markets, including in the supply of advertising opportunities, the supply of media content to consumers and the acquisition of media content from producers in Australia.

In its investigation, the ACCC focussed on various local markets in regional Western Australia where Southern Cross and Seven are the main traditional media outlets offering advertising opportunities for local businesses.

“We found that Southern Cross and Seven attract different advertisers and are not close competitors for the supply of advertising opportunities in these regions,” ACCC Deputy Chair Mick Keogh said.

“Local businesses and media agencies seeking to advertise in regional areas will continue to have a range of options in these local markets, including online and social media advertising with geo-targeting capabilities.”

The ACCC also considered whether the proposed merger could lessen competition in markets for the supply of media content to consumers or for the acquisition of media content from producers.

“The ACCC’s investigation found that Southern Cross and Seven are not close competitors for content. Southern Cross is primarily focused on radio and audio entertainment, while Seven is focused on print news and general TV,” Mr Keogh said.

It also looked at the impact of broader industry trends on competition, including the rise of streaming services and the significant growth of online advertising.

“Australian media markets are being transformed by consumers’ growing preference for digital media,” Mr Keogh said.

“This shift is leading advertisers to invest more heavily in online and digital channels.”

“Owners of traditional media platforms such as radio, free-to-air television and newspapers will continue to face strong competition from digital media. Southern Cross will be no exception, even after the acquisition,” Mr Keogh said.

“Ultimately, we found that the acquisition would be unlikely to substantially lessen competition in any market.”

The deal still requires the approval of Seven shareholders but not SCA.

Under the merger, Seven West Media shareholders will receive 0.1552 Southern Cross Media Group (SCA) shares for every Seven West Media (SWM) share, which would result in SWM shareholders and SCA shareholders owning 49.9 per cent and 50.1 per cent of the combined business, respectively.