A chorus of opposition to the planned merger of Germany's biggest newspaper and largest commercial broadcaster could complicate the deal, German media analysts say.
Axel Springer AG, Germany's largest newspaper publisher by revenue, unveiled plans this month to acquire ProSiebenSat.1 Media AG for about $5.15 billion including debt. The deal would shake up the world's third-largest media market by giving Springer control of both Germany's biggest newspaper, the tabloid Bild, and its leading broadcasting group in terms of advertising market share. Since the deal's announcement, a small army of competitors, politicians and regulatory officials has expressed reservations about the takeover's impact on both the diversity of editorial expression and the advertising market in Europe's biggest economy.
Springer and ProSieben "together have unimaginable possibilities to attack and starve any small competitor that threatens their interests," the Frankfurter Allgemeine Sonntagszeitung, a leading weekly, concluded in a recent analysis.
Springer, which is considered Germany's most conservative publisher, has responded by pointing out that rival Bertelsmann AG, Europe's dominant media group by sales, controls RTL Group SA, ProSieben's chief rival in Germany, as well as the country's biggest magazine group.
Springer's opponents say Bertelsmann's magazines are mostly nonpolitical. They also maintain that there is a difference between controlling weekly magazines and a tabloid daily that reaches 12 million people.
The resistance could prompt German competition authorities, which are reviewing the deal, to either put conditions on the transaction, such as a sale of some assets, or to reject it outright, analysts said. The regulatory reviews are expected by the end of the year.
"I think it's likely the authorities will try to impose some kind of conditions," said Horst Roeper, director of Formatt, a German media institute. "The question is whether the existing laws will be sufficient" to allow for sanctions.
The deal is being scrutinized by the German Cartel Office and the Commission to Investigate Media Concentration, or KEK.
The Cartel Office, which is examining the economic impact of the deal, is the antitrust authority and the more powerful of the two regulators. It can prevent the acquisition from going forward pending an appeal. KEK will consider whether the takeover would afford Springer too much editorial influence. If the regulator rejects the deal, Springer could complete the transaction while appealing.
Ulf Boege, chief of the Cartel Office, said his office's primary task will be to determine whether the takeover would give the company a dominant position in Germany's advertising market.
The merger "could result in adverse effects" for both the television and newspaper advertising markets, Boege said in an interview with German public television this week.
A spokeswoman for Springer said the company was confident the authority would make its decision free from political considerations.