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13 October 2016

Magazines Merger Could Face CMA Investigation

Future’s anticipated acquisition of Miura (Holdings) Ltd, the parent of Imagine, could face an in-depth investigation over competition concerns, the Competition and Markets Authority has said.

Future plc and Imagine Publishing Ltd are both prominent publishers of specialist magazines as well as bookazines, applications and websites. Their titles overlap in computing, website design and 3D modelling, gadgets, gaming, sci-fi, and photography.

In its initial investigation, the CMA found that after the merger is completed, the companies’ titles will be sufficiently constrained by competing magazines or similar online content with the exception of sci-fi magazines.

The companies’ sci-fi titles SFX and Sci-Fi Now compete closely and the available evidence showed that other magazines and online content only impose a limited competition constraint. By reducing competition between sci-fi magazine titles, the merger may therefore lead to higher prices or a reduction in choice and quality for readers.

The merger will therefore be referred for an in-depth investigation by an independent group of CMA panel members unless Future and Imagine can offer an acceptable solution to address these competition concerns in a clear-cut manner, the CMA said.

Sheldon Mills, senior director of mergers and decision maker in this case, said: “These magazines are specialist interest titles and the readers are hobbyists or professionals. The companies put to us that the magazine industry has faced a structural decline due to growth of online advertising and readership. We found some evidence in this case that readers and advertisers consider online content to be a good alternative to print magazines, but not in all areas.

“In sci-fi, the evidence pointed towards print magazines serving a distinct need for readers and so, unless this aspect of the merger is changed, the merger may increase the incentive to raise the price or reduce the quality of those magazine titles – particularly to the detriment of the readers.”