French TV merger shows European industry struggling for streaming


TF1 and M6, France’s two largest private free-to-air TV operators, will merge their media assets in a new entity, in a bid to create “a French streaming champion.” The French market and media regulators will both have to green light the complex deal.

  • The main shareholders of TF1
    and M6, respectively French construction group Bouygues
    and German media giant Bertelsmann, said on Tuesday they would merge their television divisions in a group better able to “master the new challenges of the total video market.”

  • Bouygues would ultimately own 30% of the new entity after buying part of its stake from Bertelsmann, which would retain 16% of the new group.

  • The merged entity would have €3.4 billion ($4.13 billion) of revenue based on 2020 numbers, with operating profit at €461 million. The two groups estimate annual synergies from the deal at €250-to-€350 million.

  • Groupe M6 shareholders are to receive a €1.5 special dividend, and the overall ratio exchange is estimated at 2.1 TF1 share for 1 M6 share. Nicolas de Tavernost, 70, the current head of M6, will be the chief executive of the new company.

  • M6 shares were up 4.7% and TF1’s 7.2%, respectively, in midday trading on Tuesday.

Read: Amazon eyes MGM as race for streaming domination heats up

The outlook. The deal can be expected to be scrutinized by the market regulator since the new entity, according to Le Monde, would control 75% of the television advertising market in France. The two companies will argue, however, that the “relevant market” to assess the competition impact of such a deal should not be France but at least Europe and maybe the global market.

As often happen for media deals in France, the talks had been followed with great care by the government, ever since Bertelsmann had expressed its intention to part with its French TV assets.

But the merger is unlikely to trigger major ripples on the global market. Even after the bump in both their stock prices after the news, TF1 and M6’s market capitalization only amounts to some €4 billion — less than half, for example, what online retailer Amazon
seems ready to pay for the MGM movie studio.

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