RTL and Bouygues to merge their M6 and TF1 units in France

Plans to merge M6 with TF1 (= Bouygues), presentation here:

• To carve out non-broadcasting activities of M6 into M6 Services, broadcasting activities remain listed (renamed M6 Edition, to be renamed later), M6 Services to merge into TF1, RTL contributes its 48.3% M6 stake
• M6 shareholders to receive EUR 1.00 dividend, EUR 1.50 special dividend, 1 M6 Edition share, shares in M6 Edition based on 2.1 for 1 exchange ratio
• Bouygues acquires 11% stake from RTL for EUR 641m
• Bouygues to own 30%, RTL 16% (free float 54%)
• Bouygues to have control with RTL as strategic shareholder (long-term industrial partner)
• To close end 2022
• Pro forma 2020: rev EUR 3.36b, oper profit 461m
• Target annual synergies at EBITA level of EUR 250-350m after 3 yr
• Plans 90% dividend pay-out of FCF
• Nicolas de Tavernost to be Chair & CEO, Gilles Pélisson Deputy CEO at Bouygues in charge of Media
• Bouygues to have right of first offer for RTL selling 5% stake
• To develop SVOD service based on the AVOD services 6play (M6) & MyTF1 (TF1)
• RTL: "major step in implementing our strategy to create national media champions across our European footprint (...) in-country consolidation creates significant value"

Impact

• Scale advantages, cost savings
• Complementary portfolios, better positioned for share-of-wallet in fragmenting market place
• RTL will work on similar deals in other countries
• Belgium: DPG Media (the vtm channels) could be a partner (combining RTL's Wallon business with DPG's Flemish business, i.e. with limited advantages), or alternatively Mediawan in Wallonia
• Netherlands: could propose a merger with Talpa Netwerk (the SBS channels, veronica, Net5)