July 19 (SeeNews) - Bulgaria's competition regulator said on Thursday it has banned the acquisition of 100% of Bulgaria's Nova Broadcasting Group by PPF TMT Bidco 2, a unit of Czech Republic-based investment group PPF.
The significant number of media outlets owned by the two groups will give them a competitive advantage on the media services market, which might incentivise them to increase their prices, change the terms of existing contracts or restrict access to the market, the Commission for Protection of Competition said in its decision.
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Nova Broadcasting Group 95%-owned by Sweden-based entertainment company Modern Times Group (MTG), while Luxembourg-registered Eastern European Media Holdings holds the remaining 5%.
PPF Group spokesperson Zuzana Migdalova declined to comment for SeeNews, saying the company has not yet received the regulator's official decision.
Later on Thursday, MTG said in a statement it is surprised by the decision of the Bulgarian competition authority to ban the proposed sale and will review it further before deciding on the next steps it will take.
Nova Broadcasting Group held a 30-40% market share in terms of viewers on the television broadcasting services market in 2016 and 2017, the regulator said. It controlled an identical market share in terms of revenue in 2016.
The competition regulator also established that both Nova Broadcasting Group and MTG are active on Bulgaria's e-commerce market. Considering Nova Broadcasting Group's leading position in media services, the deal is likely to negatively affect competition on this market, the regulator said.
Nova Broadcasting Group is active on the e-commerce market through its units Convenience and Trendo BG, while MTG operates in the country through its Hungarian subsidiary Online Comparison Shopping.
PPF TMT Bidco 2 has 14 days to appeal the decision before the Supreme Administrative Court.
In February, when the deal was announced, Nova Broadcasting Group's majority owner, MTG, said the transaction values 100% of Nova at 185 million euro ($214.0 million).
MTG entered Bulgaria in 2007 via the acquisition of Balkan Media Group Limited, which operated the Diema TV channels. In 2008, MTG bought Nova.
In Bulgaria, Nova Broadcasting Group's main rival is BTV Media Group, owned by Bermuda-registered Central European Media Enterprises.
PPF Group invests into multiple market segments such as banking and financial services, telecommunications, real estate and biotechnology. PPF Group's assets amounted to 35 billion euro as at June 30, 2017.
In March, Norwegian telecommunications group Telenor said it has agreed to sell its Central and Eastern European (CEE) assets to PPF for 2.8 billion euro on an enterprise value basis. The transaction includes Telenor's wholly-owned mobile operations in Hungary, Bulgaria, Montenegro and Serbia.
($ = 0.8643 euro)