Completed acquisition by United Business Media of Aprovia UK Ltd

Affected market: Media / publishing

No. ME/1347/03

Please note that the full text of the decision can be downloaded from by using the link on the right of this page . What follows are extracts regarding the parties, the transaction, jurisdiction, third party views, assessment, and decision.

The OFT's decision on reference under section 22 given on 14 November 2003

PARTIES

United Business Media (UBM) provides business information services to a variety of sectors. UBM has a professional media division CMP Information Group Ltd (CMPi). CMPi's products and services include the publication of magazines and directories and the organisation of a number of conferences targeted at professionals and businesses in the building and construction industries.

Aprovia UK Ltd (Aprovia) is the parent company of Barbour Index Ltd (Barbour) and the Builder Group Ltd (Builder). Through Builder and Barbour, Aprovia is active in the publishing of magazines and specialist directories aimed at professionals and businesses in the building and construction industries. In addition it organises certain award ceremonies and ad hoc conferences as a marketing activity to support its publishing operations. In the year ending 31 December 2002, Aprovia's UK turnover was £32.3 million.

TRANSACTION

UBM through its wholly owned subsidiary, Hirecorp Ltd (see note 1) has acquired the entire issued share capital of Aprovia, which is now a part of CMPi. The transaction was completed on 18 July 2003.

The transaction was notified by UBM on 29 August 2003.  The statutory deadline expires on 17 November, before the administrative deadline.

JURISDICTION

As a result of this transaction UBM and Aprovia have ceased to be distinct.  The parties overlap in the supply of media and information services to the construction industry and the share of supply test in section 23 of the Enterprise Act 2002 is met.  A relevant merger situation has been created.

THIRD PARTY VIEWS

Third party views were mixed. The concerns stated were that the merged firm would become very large and have a high share of the advertising revenues and readership in magazines for the architecture and construction sectors.  Also that the merged firm would be able to offer portfolio discounts, making it more difficult for smaller competitors to compete.  However there were no customer concerns.

ASSESSMENT

The parties overlap specifically in the supply of advertising in architecture and construction publications.  However, this distinction does not appear to be an appropriate basis on which to consider the merger due to both supply and demand side substitution between publications in the narrowly defined sectors.

The merged firm will continue to face competition from a variety of competitors, as well as additional constraints from outside the 'construction' media sector.  Advertisers have the ability to cut their advertising budget, thus reducing the profitability of any price increase, and to switch to other mediums such as direct mail campaigns and internet advertising if the price offered by the merged firm is not good value for money. Portfolio issues do not appear likely to arise due to the merged firms lack of market power in any one product area.

Barriers to entry to the industry do not appear to be insurmountable and there are a number of firms active in business to business publishing that would be well placed to expand their product range if the offer of the merged firm were to deteriorate as a result of the merger.

The OFT does not believe, therefore, that it is or may be the case that the creation of the relevant merger situation has resulted or may be expected to result in a substantial lessening of competition within a market or markets in the United Kingdom for goods or services.

DECISION

This merger will therefore not be referred to the Competition Commission under section 22(1) of the Act.

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