In what the companies are calling a consolidated effort to “master the challenges arising from the accelerating competition with global platforms”, French media companies Groupe TF1 and Groupe M6, and parent companies Groupe Bouygues and RTL Group, have unveiled plans for a merger.
Under the proposed terms of the deal, Groupe Bouygues is set to own approximately 30% of the merged entity, which it would have exclusive control over, as part of a shareholder agreement with Bertelsmann-owned RTL Group, the second largest shareholder with approximatively 16%. M6 CEO Nicolas de Tavernost will be put forward as chairman and CEO of the merged entity, while Groupe TF1 CEO Gilles Pélisson will be proposed as deputy CEO of Groupe Bouygues in charge of media and development.
The merged company will also have a new name, yet to be revealed. The transaction is expected to close by the end of 2022.
The merger is being framed by the participants as a reaction to the structural transformation of content consumption, with its aims including the “development of a French streaming champion”; the development of local and international production hubs as well as innovative streaming and advertising technologies; and strengthening the supply of quality French content.
From a financial perspective, the merged company would have 2020 pro forma revenue of €3.4 billion, or approximately US$4.1 billion, and current operating profit of €461 million, or approximately $563 million. The synergies potential, meanwhile, is estimated at €250 million, or $305 million, to €350 million, or $427 million, per year within three years from the closing of the transaction.
“The consolidation of the French television and audiovisual markets is an absolute necessity if the French audience and the industry as a whole are to continue to play a predominant role in the face of exacerbated international competition, which is accelerating rapidly,” said Groupe M6′s De Tavernost in a statement. “The combination of the two groups’ know-how will allow for an ambitious French response.”
“The merger between Groupe TF1 and Groupe M6 is a great opportunity to create a French total video champion that will guarantee independence, quality of content, and pluralism –- values that have long been shared by our two groups,” added TF1′s Pélisson. “It will be an asset in promoting French culture.”