Brussels, 7 January 2004
Commission gives go-ahead for Lagardère to acquire part of the publishing business of Editis (former VUP)
The European Commission has authorised the French group Lagardère to acquire part of the publishing business of Editis (formerly known as Vivendi Universal Publishing or VUP). The transaction initially notified was for Editis to be taken over in its entirety, but this would have created or strengthened dominant positions on many of the markets making up the French-language book chain, such as those for publishing rights, marketing and distribution services and sales of books to dealers and by wholesalers. Lagardère's decision to retain only part of the Editis business satisfied the objections.
Editis is currently the leader in the publishing, marketing and distribution of French-language books. Lagardère, via its subsidiary Hachette Livre, is the second player in the market. The group is also active in book retailing, broadcasting and newspaper publishing and distribution.
The acquisition of the entire Editis publishing business in the European Union and in Latin America, as planned in the transaction notified to the Commission, would have produced a heavily dominant group with a turnover seven times that of its nearest rival.
The Commission's investigation and analysis revealed that the new entity would control access both to the "raw material", i.e. well-known authors, whose sales are the lifeblood of publishers, and to sales outlets, which cannot absorb, let alone promote, more than a limited proportion of the works published each year. In addition the supremacy of the new entity in the more industrialised part of the publishing business marketing, distribution and publishing in pocket format would have resulted in a two-speed industry: on the one hand, dependent publishers left on the sidelines with no alternative but to engage in the riskier business of prospection and creation and, on the other hand, an industrial group integrated along the entire book chain and capable of retaining the best-selling authors and monopolising most of shelves in bookshops.
The transaction prompted serious concern among many other players in the French-language publishing trade, including associations of authors, (large and small) booksellers and readers, as well as independent publishers and wholesalers who were wary of a reduction in supply. Many booksellers also expressed fears that the discounts they are granted might be cut, thus jeopardising the very existence of certain outlets.
In reply to the Commission's concerns, Lagardère has undertaken to sell Editis with the exception of the following assets, which make up around 40% of the total turnover of the company:
On the basis of these undertakings, the transaction no longer presents any competition problems and can therefore be authorised. It should be pointed out that the Commission detected problems on the French-language publishing sector alone, where the Spanish group Anaya is not present. The assets retained are in sectors where the transaction does not create a dominant position (essentially academic and reference works).
The timescale for the sale agreed with Lagardère remains confidential, standard practice in cases where the go-ahead is subject to the sale of assets. As is also the rule, the Commission will have to approve the buyer or buyers of the assets in order to ensure that effective and lasting competition is maintained in the market.