The Taylor Nelson Sofres merger with Nuremberg-based research company GfK has hit a fresh snag after respected independent study group Enders Analysis said it raised serious European Union competition issues in the area of television audience measurement (MW May 1).
Sources close to TNS deny there is a material problem.
“If unhindered by remedy solutions imposed by the [European] Commission, TNS-GfK will control about 50% of the TV audience measurement segment in Europe, the rest being supplied by AGB Nielsen,” says the report. “Because the Commission is likely to insist on three suppliers remaining in the TAM market, we anticipate TNS-GfK could offer to divest GfK’s European activity, although this will depress the margin improvements from synergies.”
It notes that WPP “also appears to be interested in acquiring TNS”. WPP owns a half-share of AGBNielsen, but Enders concludes: “The market share of the combined company in Europe is probably not high enough to warrant intervention.”
Separately, there has been growing opposition to the merger in Germany. Politicians are concerned it would lead to serious job losses in Bavaria at a time when other companies, such as Nokia and Siemens, are downsizing their local work force.
The situation is complicated by the fact that GfK is 57% owned by GfK-Verein, a charity on whose board sit influential representatives of the Bavarian state and the city of Nuremberg (pictured). Both parties are reported to be voting “against the merger as things stand”, according to mainstream German media.
GfK-Verein has put back its vote on whether to accept the merger from July 4 to July 21. The new date would fall after the general meeting of TNS shareholders on July 18, which will determine their own attitude to the merger.
A WPP source says: “The GfK merger is a shambles. 24 hours after TNS and GfK publish a 400-page [prospectus] document, they change their timetable.”