The Australian Competition and Consumer Commission (ACCC) has announced it will not oppose the Macquarie, Fairfax radio merger on the grounds of competition.
The deal between the Fairfax Radio Network and the Macquarie Radio Network was made at the close of last year, and is still subject to a shareholder vote, expected in March.
The proposal would see MRN acquire 100% of Fairfax's radio shares, with Fairfax receiving issuance of new MRN shares, equating to a 54.5% majority shareholding in the business.
Following the announcement, the ACCC said it would conduct an investigation into the proposal on the grounds of competition within the radio market
However, in a statement today, ACCC chairman Rod Sims said the combined Macquarie/Fairfax radio business will continue to face strong competition from other commercial radio stations.
“The ACCC considered the effect of the proposed transaction on the price of radio advertising, as well as the quality of news and other content provided to audiences,” Sims said.
“While few other commercial radio stations currently operate the same talkback format as 2UE and 2GB, other radio stations would be able to change their format and programming to include talkback if it made commercial sense to do so.”
Following the transaction MRN will own three commercial radio licences in Sydney – 2UE, 2GB and 2CH – but has stated that due to regulatory requirements under the Australian Communications and Media Authority (ACMA) it will sell 2CH following the merger.
The ACCC said the combination of 2UE and 2GB will provide a “strong position” in serving the older demographic in Sydney.
The deal is subject to shareholder approval. In a statement to the ASX, MRN's directors noted their intention to recommend shareholders vote in favour of the transaction.
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