Aussie tie-ups, deals flourish with new laws
EmptyNew laws repealing 20-year-old restrictions on foreign and cross-media ownership of Australian media companies will officially take effect Wednesday, the Australian government said Thursday.
The announcement marks the final step in the conservative government's media reform process, which already has begun to reshape the country's AUS$12 billion ($9.6 billion) media sector and is expected to trigger a second wave of merger and acquisition activity after an initial flurry of multibillion-dollar deals that followed October's passage of the laws.
Communications Minister Senator Helen Coonan said Thursday that the reforms will protect the public interest and ensure a diverse and vibrant media sector.
"The government's media reforms will encourage greater competition and allow media companies to achieve economies of scale and scope while maintaining the diversity of Australia's media landscape," Coonan said in a statement.
"The current foreign ownership and control restrictions relating to free-to-air and subscription television, and cross-media ownership restrictions on commercial radio and television licenses and associated newspapers, have for too long limited competition in the media sector. They have restricted access to foreign capital and expertise and stifled opportunities for growth," she added.
In the first round of merger and acquisition activity late last year, the Packer family's Publishing and Broadcasting Ltd. spun off its media assets, including the Nine TV network and ACP Magazines, into a AUS$4.5 billion ($3.6 billion) joint venture with private equity group CVC Asia Pacific.
That deal was mirrored several weeks later by Kerry Stokes, who tipped his Seven Network and Pacific Magazines into a AUS$4 billion ($3.2 billion) joint venture with Kohlberg Kravis Roberts.
Newspaper and digital media groups John Fairfax Holdings and Rural Press then announced a AUS$9 billion ($7.2 billion) merger, making it Australia's largest diversified media group. Meanwhile, CanWest Global Communications is looking for a buyer for its 56.4% stake in Ten Network Holdings.
Regional TV broadcaster Prime Television said last week that it was in discussions to acquire production and distribution company the Becker Group, while Village Roadshow-owned radio group Austereo, regional radio and TV broadcaster Southern Cross Broadcasting and Liberty Media-owned pay TV company Austar Communications are tipped as likely takeover targets.
Under the new rules, foreign ownership restrictions on commercial TV and pay TV licenses will be removed; cross-media ownership restrictions on commercial radio, TV and newspaper groups will be lifted; regional TV broadcasters will be required to broadcast certain levels of local news and programming; and regional radio licensees will have to maintain certain local content levels and services if there is a consolidation of ownership in a particular market.
The new laws require that a minimum of five independent media operations are maintained in metropolitan markets (four in regional markets), and media owners are restricted to owning two of three media — TV, radio or newspapers — in any one license area. Foreign investments above 5% must still be approved by Australia's Treasurer and the Foreign Investment Review Board.