The proposed “merger of equals” between market research giants Taylor Nelson Sofres and GfK may run into trouble with European Union competition authorities.
According to one informed source: “If this goes through, the European regulators will look dimly on the number of research companies capable of competing for TV measurement contracts going down from three to two. They’re very hot on that sort of thing.” The third company referred to is Nielsen.
GfK and TNS outlined a proposed shares-only merger this week, which would make it the second-largest market information group in the world by revenue. The proposed new group GfK-TNS, in which existing shareholders would hold 50% of each company, would have a unitary board.
According to Bob Willott, editor of Marketing Services Financial Intelligence, GfK is the more profitable of the two companies and less debt-laden. However, David Lowden, chief executive of TNS, will become group chief executive rather than Klaus Wubbenhorst, chief executive of GfK. Wubbenhorst will be a non-executive director. The global head office of the company will be in London. But, according to a joint TNS/GfK press release, “significant business operations [will] be based in Nuremberg”, the headquarters of GfK.
Though both companies have global interests, they are particularly strong in Western Europe. A merger would result in nearly 70% of joint revenues coming out of Europe, about 20% from North America and 10% from emerging markets.