Brussels, 9 June 2023
The European Commission has approved, under the EU Merger Regulation, the proposed acquisition of Lagardère by Vivendi. The Commission’s decision is conditional upon full compliance with the commitments offered by Vivendi.
Today’s decision follows an in-depth investigation of the proposed acquisition. Vivendi and Lagardère are two large French multi-media groups. In particular, Vivendi (via Editis) and Lagardère (via Hachette) are leading players in book publishing 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 two groups are also both involved in other media activities, such as press and live entertainment in France. Lagardère is also active in the radio sector and Vivendi in audio-visual production.
The Commission’s investigation
During its in-depth investigation, the Commission gathered extensive information and feedback from numerous market participants, including authors, editors, book retailers and readers.
Following its market investigation, the Commission had concerns that the transaction, as initially notified, would harm competition in book publishing, especially on the markets for the purchasing of authors’ rights for French-language books and the distribution, marketing and sales of French-language books to retailers. The Commission also had concerns that the transaction, as initially notified, would harm competition in press magazines. In particular, the Commission found that:
- Editis and Hachette are the number one and two market players at most levels of the book value chain, where they closely compete. Their integrated presence at different levels of the book value chain further strengthens their position on various book publishing markets.
- There are only a limited number of credible players active throughout the book value chain and with the ability to compete with the merged entity. As a result, the transaction would have significantly reduced competition in the book publishing markets, with a detrimental impact on authors, smaller publishers, book retailers and ultimately consumers.
- The transaction would have reduced choice and increased prices for celebrity magazines in France, in particular Paris Match of Lagardère and Gala of Vivendi, which are very closely competing.
To address the Commission’s competition concerns, Vivendi offered a substantial remedy package consisting in the full divestment of:
- Vivendi’s publishing business, Editis and its entities, including well-known publishers such as Robert Laffont, Nathan, Le Robert and Pocket; and
- Vivendi’s celebrity press magazine Gala published in France.
These commitments fully address the competition concerns identified by the Commission. Feedback received from customers and competitors in the market test of the proposed commitments confirmed the Commission’s view that the divested assets constitute a viable business that would enable a potential buyer to effectively compete with the merged entity.
The Commission therefore concluded that the transaction, as modified by the commitments, would no longer raise competition concerns. The Commission’s decision is conditional upon full compliance with the commitments. Under supervision of the Commission, an independent trustee will monitor their implementation.
The Commission will assess the suitability of buyers proposed by Vivendi in the context of a separate buyer approval procedure. Pursuant to the commitments, Vivendi can only implement the acquisition of Lagardère following the Commission’s approval of a suitable purchaser.
In the course of its in-depth investigation, the Commission worked in close cooperation with competition and regulatory authorities, notably the French Regulatory Authority for Audiovisual and Digital Communication (‘ARCOM’) and the French Financial Markets Authority (‘AMF’).
Companies and product
Vivendi is a French global media and entertainment group mainly 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 in 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 procedures
The transaction was notified to the Commission on 24 October 2022 and the Commission opened an in-depth investigation on 30 November 2022.
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 European Economic Area 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).
There are currently four on-going Phase II merger investigations: (i) the proposed acquisition of eTraveli by Booking; (ii) the proposed acquisition of VMware by Broadcom; (iii) the proposed acquisition of Asiana by Korean Air: and (iv) the proposed creation of a joint venture by Orange and MasMovil.
Vivendi and Lagardère are leading publishers of French-language books and magazines. We need to make sure that the book publishing and press markets remain competitive and diversified, to foster a plurality of ideas and opinions. The remedies proposed by Vivendi will allow for the preservation of existing competition in those markets, to the benefit of consumers.