Spanish competition regulator OKs Digital Plus merger

Spain’s competition regulator the CNC has given a green light to the entry of Mediaset-owned Telecinco and telco Telefónica into Prisa-owned pay TV operator Digital Plus.

The agreement means that Telecinco can go ahead with the acquisition of a 22% stake in the Spanish pay TV operator, with Telefónica’s acquisition of the same stake to follow. In order to allay competition concerns, the original merger agreement has been amended to give Prisa continued control of the pay TV operator’s strategic direction, with Telecinco and Telefónica waiving rights of veto over strategic decisions and the election of directors. Any future change in the organisational structure of Digital Plus would require authorization by the CNC.

Commercial rivals Mediapro, which operates the La Sexta channel, and Antena 3, have reacted angrily to the decision, with both describing the merger as a serious assault on competition in the Spanish market. Antena 3 said that it would look to all legal options to challenge the decision and said that the waiver did not mean that Telecinco and Telefónica would not be involved in management of the pay TV operator.

According to Mediaset, Prisa has also given Telecinco an option to “reset the initial conditions of the agreement announced on December 18”. If Telecinco decides to exercise that option but finds that the CNC imposes conditions that are unacceptable to the two parties, Telecinco and Prisa will withdraw from the part of the agreement relating to the sale of the 22% stake to Telecinco.

The merger of Telecinco with Prisa’s free-to-air channel Cuatro was approved by the CNC with conditions in October.

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