Mergers: Commission opens in-depth investigation into the proposed acquisition of Lagardère by Vivendi

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This article is brought to you in association with the European Commission.


The European Commission has opened an in-depth investigation to assess, under the EU Merger Regulation, the proposed acquisition of Lagardère by Vivendi. The Commission is concerned that the proposed acquisition may reduce competition on a number of markets across the entire book value chain in French-speaking countries of the European Economic Area (EEA) and in a segment of magazine publishing in France.

Vivendi and Lagardère are both French multi-media groups active, among others, in book and magazine publishing. For what concerns these markets, Vivendi (via Editis) and Lagardère (via Hachette) are leading players in the publishing of French-language books in French-speaking countries of the European Union. Both companies are active throughout the book value chain, from the acquisition of publishing rights to the marketing, distribution and sale of books to retailers.

The Commission’s preliminary competition concerns

The Commission’s preliminary market investigation indicates that the transaction may significantly reduce competition on the markets for (i) the purchasing of authors’ rights for French-language books, (ii) the distribution and marketing of French-language books, and (iii) the sales of French-language books to retailers. The Commission also identified competition concerns in relation to the sale of celebrity magazines.

At this stage, the Commission is concerned that:

  • By acquiring Lagardère, Vivendi would become the number one player in the French-language book publishing sector, as well as the main integrated group active on that market. The parties are the first and second largest companies active on most of the markets of the book value chain. Other competitors, such as Madrigall or Média-Participations, have a more limited market presence. The Commission is concerned that the transaction may reduce French-language book diversity, accessibility and affordability. In particular, the Commission considers that, because of the strengthened market position of the combined entity: (i) publishers may be deprived of critical sources of revenues to sustain their activities stemming from the publishing of best-selling authors, (ii) publishers may be restricted in their access to crucial services for the marketing and distribution of their books, and (iii) bookshops and readers may face reduced margins and increased prices, respectively.
  • The transaction would combine three celebrity magazines, namely Paris Match of Lagardère and Gala and Voici of Vivendi, and may create a strong leader on the market. The Commission is concerned that this could negatively impact quality, diversity and prices for readers of this type of magazines.

The Commission will now carry out an in-depth investigation into the potential effects of the transaction to determine whether its initial competition concerns are confirmed.

The transaction was notified to the Commission on 24 October 2022. Vivendi publicly communicated that it considered the possibility of a divestment of Editis through a distribution and stock market listing but it decided not to submit commitments to address the Commission’s preliminary concerns during the initial investigation. The Commission now has 90 working days, until 19 April 2023, to take a decision. The opening of an in-depth inquiry does not prejudge the outcome of the investigation.

Companies

Vivendi is a French global media and entertainment group active in different markets through its subsidiaries: in television and cinema (Canal+ Group), book publishing (Editis), magazines (Prisma Media), video games (Gameloft), and advertising (Havas Group). Vivendi is controlled by the Bolloré group, a global company active in three main areas: transportation and logistics, media and communications, electricity storage.  

Lagardère is a French global media and entertainment group active different markets through its subsidiaries: in book publishing (Hachette), travel retail (Lagardère Travel Retail), press and radio (Europe 1), and live entertainment (Lagardère Live Entertainment).

Merger control and procedure

The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.

The vast majority of notified mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).

In addition to the current transaction, there are five ongoing Phase II merger investigations:  (i) the proposed acquisition of OMV Slovenija by MOL; (ii) the proposed acquisition of VOO and Brutélé by Orange; (iii) the proposed acquisition of Alumetal by Hydro; (iv) the proposed acquisition of Activision Blizzard by Microsoft; and (v) the proposed acquisition of eTraveli by Booking.

More information will be available on the Commission’s competition website, in the Commission’s public case register under the case number M.10433.

Quote(s)

Competitive markets in book publishing foster the diversity of ideas. It enables each part of the value chain to thrive, from the creation of content to the distribution. The acquisition of Lagardère by Vivendi brings together two leading publishers of French-language books and of popular magazines. Therefore, the transaction needs to be carefully assessed as it could reduce choice and lead to higher prices, less accessibility and lower quality for readers of French-language books and of certain French magazines.Margrethe Vestager, Executive Vice-President in charge of competition policy – 30/11/2022

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