RTL announced it has entered into exclusive negotiations to merge its French television business M6 with its larger domestic rival TF1, part of conglomerate Bouygues. This follows a sale process that started earlier this year for the company’s controlling 48 percent stake in M6, which attracted bids from Vivendi and Mediaset, among others.
The proposed merger with TF1 depends on obtaining clearance from the French competition authorities and broadcast watchdog CSA. A lengthy review is anticipated in a test to the country’s antitrust rules, with completion of the transaction expected by end-2022.
If successful, the operation could see the creation of a broadcaster which in 2020 would have generated EUR 3.4 billion in revenues and EUR 461 million in current operating profit, based on pro forma financial results. The synergies potential (EBITA run-rate impact) is estimated at EUR 250-350 million annually within three years from closing of the transaction.
Under the agreement, Bouygues would have control over the merged entity, with a stake in the region of 30 percent. RTL would be the second largest shareholder with approximately 16 percent.
The two partners have detailed a number of steps to achieve the operation. Among them, M6 shareholders would receive a EUR 1.50 exceptional dividend in the transaction. Additionally, Bouygues would pay RTL EUR 641 million in cash for 11 percent of the combined entity to take its stake to 30 percent.
