Axel Springer AG withdraws proposal for remedy vis-à-vis the Federal Cartel Office




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16.01.06

Axel Springer AG withdraws proposal for remedy vis-à-vis the Federal Cartel Office

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The management board of Axel Springer AG has decided to withdraw the proposal for a remedy made to the Federal Cartel Office to sell the TV station ProSieben in order to receive anti-trust clearance for the acquisition of ProSiebenSat.1 Media AG.

The Federal Cartel Office had informed Axel Springer on January 11, 2006 that it intends to clear the merger if the TV station ProSieben is sold and its advertising sales operation is separated from the joint advertising sales operation of the group prior to the closing of the transaction.

Axel Springer AG had proposed to sell ProSieben within an appropriate period of time following the closing of the transaction. The Federal Cartel Office could have included this as a binding remedy in its decision to clear the merger, but declined to do so.

Axel Springer has analysed the proposal of the Federal Cartel Office in detail and has concluded that the demand of the Federal Cartel Office can legally not be implemented. It would result in Axel Springer AG having to sell a TV station before it legally owns it.

Despite these concerns, Axel Springer AG has proposed a number of transaction options to the Federal Cartel Office in the last few days, which would have resulted in separating ProSieben from ProSiebenSat.1 Media AG prior to (!) the closing of the overall transaction. However, the Federal Cartel Office has rejected all these transaction options. According to the Federal Cartel Office, even the acquisition of ProSiebenSat.1 Media AG including the TV station ProSieben for a „legal second“ would lead to unacceptable restrictions of competition.

Axel Springer AG regrets that this position of the Federal Cartel Office has blocked this potential route to a clearance – which was originally introduced by the Federal Cartel Office itself – for procedural reasons and has therefore withdrawn its proposal to sell ProSieben GmbH. As the result, the Federal Cartel Office misses the opportunity to eliminate the alleged duopoly without competition in the TV market – about which it has complained previously – and to promote competition. As recently as January 11, 2006 the Federal Cartel Office has declared that „the duopoly without competition [will be] eliminated by separating the TV station ProSieben from the acquisition target”.

Axel Springer AG now expects that the Federal Cartel Office will issue a prohibition notice and will then analyze which possibilities for an appeal and which other options are available.

Press Contact Axel Springer SE: Edda Fels
Tel: +49 30 2591 77600