Mecom’s scorching policy on Europe

The British media investor Mecom is following a scorching policy in building a European newspaper and online empire. Having just published a prospectus for acquiring the Dutch newspaper company Royal Wegener, Peter Skulimma, member of the board charged with strategy, is on his next mission: the German market.

Mecom is expanding its newspaper and online business on the European continent. The company owns newspaper operations in Denmark, Norway and Poland. With Wegener the company will have the majority of the regional newspaper market in the Netherlands. And the company has already regional newspapers in Hamburg and Berlin. But the company wants more of the German market.

The Dutch newspaper market is a curious market with a dominance of national newspapers and rather strict regulations on cross-media ownership. But the German market situation is even worse, as can be seen from the typology of the German newspaper market. There are many regional newspapers and hardly any national newspapers, except for three titles: Bild, Süddeutsche Zeiting and der Frankfurter Allgemeine Zeitung. This development is due to the legal framework which finds its origins in the legislation after the Second World War.

But Mecom wants to change the landscape of the German newspapers. It has already two newspaper operations in Germany and recently bought Netzeitung. But Mecom wants more. The company has been talking to the managers of the mostly family-owned companies. It has also started to throw up ideas like a Sunday paper for its Berlin newspaper, which would cost Mecom more than a seven digit figure to start up. In an interview with Reuters Peter Skulimma indicated in what direction he is thinking by dropping a few names, for example of the Sächsische Zeitung and the Süddeutsche Zeiting. So far Mecom has only companies in the Northern part of Germany. So a Southern or a national newspaper would be welcome to reach more nation wide coverage.

Establishing a stronghold in Germany would give Mecom the chance to connect the newspaper companies in the other countries from Norway to Denmark and Germany, from Poland to Germany and from the Netherlands to Germany. It would also open up the road for a sweep into Austria and Switzerland. From there Mecom either could go South to France, Italy or Spain. But it has also the opportunity to go East to Central and East Europe as well as the Balkan; this could be a likely option, given the experience with its Polish subsidiary

UPDATE 24 August 2007: A prospectus has been issued by Mecom in connection with the offer of up to 488,997,935 new ordinary Mecom shares of 0.6085888 pence each in connection with the proposed acquisition of the Dutch publishing group Koninklijke Wegener n.v. In the last month Mecom has expanded its sharehold in Wegener up to almost 30 percent. A note for a recommended public offer has been published.

UPDATE 28 August 2007: Mecom has published its official offer for Wegener shares and put then on 17,70 euro. This brings the total for the company on 800 million euro. The offer is the same as the offer of last June. Mecom already has 30,3 percent of the shares of Wegener.

Blog Posting Number: 850

Tags: newspaper: newspaper