The Australian competition regulator (ACCC) has approved the JCDecaux's purchase of APN Outdoor as well as oOh!media's acquisition of Here There & Everywhere's street furniture arm Adshel.
As most already know, the outdoor sector is booming with growth outpacing other sectors of the advertising industry. Much of that growth is related to digital advertising and not print.
oOh!media chief executive Brendon Cook said in a statement the acquisition would add a “missing piece” to its offering, including coveted rail network assets in Sydney and Melbourne.“The digitisation opportunity in the Adshel business is expected to provide a significant avenue for further growth beyond what has been achieved to date,” he said. Mr Cook confirmed with Fairfax Media the Adshel name would be replaced with OohMedia’s in the next three months.
A spokeswoman for JCDecaux said in a statement the merger of the two businesses would make it “more competitive within the broader media sector”.“This is a step in the right direction to grow the Out of Home media sector in Australia which currently represents only 6 per cent of advertising spend,” she said.
Citi analyst David Kaynes told investors profitability “should increase across the industry” with global counterparts operating in less competitive markets being “substantially more profitable than the Australian out-of-home providers”.“Part of this is due to scale, but we also believe this is due to lower competition. Consolidation will help bridge this profitability gap and could also eventually lead to a re-rating in line with global peers,” he said.
Source: Sydney Morning Herald & CMO
