RTL to merge M6 with TF1 to build new French media champion
Luxembourg-based RTL Group's M6 television unit is entering formal merger talks with domestic rival TF1 to create a new French media heavyweight that faces scrutiny by shareholders and competition regulators.
TF1 and M6 on Monday formalised their negotiations on a merged company that would generate a combined turnover of around €3.4 billion, the companies announced late on Monday.
The companies are expected to urge regulators to allow the combination, which would dominate the French television advertising market, as the only way to effectively challenge giants like Netflix, Amazon and Disney in the growing market for on-demand streaming video content.
"The proposed merger is critical to ensure the long-term independence of French content creation and to continue to offer diversified and premium local content", the companies said in a press release.
RTL Group CEO Thomas Rabe said merging TF1 and M6 would be a major step in his long-discussed "strategy to create national media champions across our European footprint".
TF1's owner, the conglomerate Bouygues, would buy 11% of the merged company for €641 million from M6 owner RTL, the companies said. Bouygues would own 30% and RTL Group 16% of the new group, with the remainder being publicly listed on the Euronext Paris stock exchange.
The two groups hope to complete the transaction by the end of 2022 and convince their shareholders in the meantime. The merger also needs the approval of French competition and audio-visual regulators.
RTL still employs 600 people at its headquarters in Luxembourg's Kirchberg business district, although many of its operations have been moved to Cologne.
This month, Luxembourg's Prime Minister Xavier Bettel said after 2023 his government was likely to pay RTL more than the €10 million a year it now spends for the broadcaster to air Luxembourgish-language programmes. The sides are negotiating a new seven-year contract that would run until 2030.
RTL's previous agreement with the government had remained a secret until Pirate Party lawmaker Sven Clement won a court cause forcing the government to make the contents available to lawmakers.