The European Commission has cleared Discovery Communications' cleared acquisition of Scripps Networks Interactive, subject to conditions.
The EC’s approval is conditional on Discovery’s commitment to offer third party distributors the right, on a non-exclusive and unbundled basis, to distribute TVN24 and/or TVN24 BiS in Poland.
The Commission’s investigation found that in the UK, the proposed transaction would raise no competition issues given the limited overlap between the companies’ activities.
In Poland, the proposed transaction risked increasing Discovery’s bargaining power vis-à-vis TV distributors because of the acquisition of certain channels that are particularly important in distributors’ basic pay-TV channel packages. In particular, TVN24, TVN’s flagship news channel, was identified as crucial to retail TV offerings. Following the transaction, Discovery would have had the ability and incentive to impose the licensing of its whole TV channel portfolio. This would have allowed it to increase its licensing fees to the detriment of Polish consumers and competition.
To address the Commission’s competition concerns, Discovery has committed to making TVN24 and its sister channel TVN24 Bis available to current and future TV distributors in Poland for a reasonable fee determined by reference to comparable agreements. This commitment will remain in place for a period of seven years.
“We are pleased with the positive decision of the European Commission,” said David Zaslav, president and chief executive officer, Discovery. “We believe that joining the Discovery and Scripps Networks’ family of brands and assets will allow us to better serve our passionate fans with more content on more platforms worldwide, while at the same time optimising our business for greater efficiency.”
Discovery announced in July 2017 that it had reached a definitive agreement to acquire Scripps Networks in a cash-and-stock transaction.
The deal is expected to close later in Q1 of 2018.