Bundeskartellamt again prohibits Holtzbrinck / Berliner Verlag merger

The Bundeskartellamt in Bonn has again prohibited Holtzbrinck KG from acquiring control of Berliner Verlag KG. The merger would have led to the creation of a dominant position held by Holtzbrinck in the reader market for regional subscription dailies in Berlin and the Berlin reader market for city magazines.

The President of the Bundeskartellamt, Ulf Böge, stated: “The companies have not been able to dispel the Bundeskartellamt’s competition concerns after the warning issued on 18 December 2003. In the Bundeskartellamt’s view the shares in Tagesspiegel which are to be sold to Dr. Gerckens by Holtzbrinck are to be classified as belonging to Holtzbrinck. The effects on competition of this case thus largely correspond to those of the merger project which was already examined and prohibited by the Bundeskartellamt in 2002.”

The allocability of the Tagesspiegel is primarily determined on the basis of the economic assessment of the purchase contract concluded between Holtzbrinck and Dr. Gerckens and in consideration of the overall circumstances of the case (cf. press release of 19 December 2003). A reduction of the call option’s time limit to one year ending on 31 December 2004 as proposed by Holtzbrinck does not justify any different competitive assessment. The call option is still a sign of the companies’ intention to establish a merged newspaper company for the Berlin area consisting of Tagesspiegel and Berliner Zeitung. This is proven by the background of the case, the “letter of intent” agreed between Holtzbrinck and Dr. Gerckens and further statements made by the companies in the course of the proceedings. The proposal to reduce the call option’s time limit was only made in view of the reform of merger control of the printed media which the parties involved expect to take place by 31 December 2004.

Even if Dr. Gerckens’ shares in Tagesspiegel were not classified as still belonging to Holtzbrinck the project could not be cleared under the legal provisions because it would create a joint dominant position held by Holtzbrinck (then Berliner Zeitung) and Dr. Gerckens (Tagesspiegel) in the Berlin reader market for regional subscription dailies.

The companies involved can file an appeal against this decision at the Düsseldorf Higher Regional Court.