SYDNEY (Reuters) - Australia’s two biggest billboard companies on Friday called off a deal in which APN Outdoor Group Ltd (APO.AX) would buy rival oOh!media Ltd (OML.AX) for A$735 million ($544.93 million), after the antitrust regulator raised concerns.
The companies said in a statement that they disagreed with the view that a tie-up would harm competition but that regulatory intervention “represents an unacceptable risk to a successful merger”.
“The advertising market is increasingly dominated by online digital advertising services and a merger of the two businesses would enhance, rather than restrict, the development of the out-of-home advertising services in Australia,” the statement said.
If the companies made concessions to satisfy the Australian Competition and Consumer Commission’s concerns, it “would adversely compromise the overall merits of the transaction”, it added.
Announcing the all-shares deal in December, APN and oOh!Media said they would cut costs and improve their ability to grow.
But earlier this month the ACCC said it took a preliminary view that combining the companies would amount to a “substantial lessening of competition” and possibly less innovation.
For shareholders of oOh!Media, the deal, worth A$4.48 per share, represented a more than doubling of its issue price when it listed just two years earlier. Its shares closed at A$4.43 on Thursday.
($1 = 1.3488 Australian dollars)
Reporting by Byron Kaye; Editing by Stephen Coates