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Watchdog sees potential issues with mega media takeover

Ljubljana, 07 November (STA) - The Slovenian competition watchdog has pinpointed several potential issues with the proposed takeover of Slovenia's biggest commercial broadcaster by cable operator United Group as it issued a statement of objections on Wednesday as part of its regulatory review of the takeover.

The takeover of Pro Plus, which operates several commercial TV channels, could lead to horizontal concentration on the TV advertising market, the market for TV sports rights, and the wholesale of children's TV programmes, the Competition Protection Agency said.

It also raises the prospect of permanent concerted action with other operators on the market and the possibility of licenses for the distribution of Pro Plus channels increasing. Competitive programmes in the bundles of United Group's Slovenian cable operator Telemach could be sidelined as well.

Finally, the acquisition could have other effects since "the combined company would acquire sensitive business information about their competitors, would give it a significant competitive edge," the document reads.

These preliminary findings do not prejudge the agency's final decision and United Group has 45 days to submit remarks in its favour.

As the agency points out, it may also propose "corrective measures eliminating serious suspicion about the conformity of the concentration with competition rules."

United Group said today that it was already drawing up its remarks. "We do however expect that the final decision will be in conformity with EU competition law."

The biggest media takeover in Slovenian history is being closely watched.

Domestic media players and media experts have expressed fears that it may lead to excessive concentration of power in the hands of a single, US-owned media group.

United Group, meanwhile, has been berating the regulator for the long duration of the procedure.

Pro Plus not only owns two of the most popular TV channels, POP TV and Kanal A, it also operates several cable-only channels, a pay-per-view service, and 24ur.com, one of the top news portals in the country.

United Group acquired the media portfolio of the Central European Media Enterprises (CME) in Slovenia and Croatia, which includes Slovenia's Pro Plus, last July. The entire deal has been estimated at EUR 230m.

United Group is owned by the Kohlberg Kravis Roberts (KKR) investment fund and the European Bank for Reconstruction and Development (EBRD), but an agreement was reached last month to sell a majority stake to the international investment firm BC Partners.

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