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European Commission clears F1 sale to CVC

NEWS STORY
21/03/2006

The European Commission has cleared under the EU Merger Regulation the proposed acquisition by the private equity investment firm CVC of SLEC, the owner of the Formula One Group.

However, the Commission's clearance is conditional upon the divestiture by CVC of its Spanish subsidiary Dorna, which is the promoter of the MotoGP motorcycle Championship.

In light of these commitments, the Commission has concluded that the transaction would not significantly impede effective competition in the EEA or any substantial part of it.

"When the two most popular motor sport events in the EU, Formula One and MotoGP, come into the hands of one owner, there is a risk of price increases for the TV rights to these events and a reduction in consumer choice. I am satisfied that the commitments given by CVC will eliminate this risk," said Competition Commissioner Neelie Kroes.

SLEC is a holding company owning all the rights in the Formula One Group. CVC is already active in the field of motor sports through its subsidiary Dorna, the promoter of the Moto GP motorcycle Championship, the FIM Supercross World Championship, the Spanish Road Racing Championship and the British Superbike Championship. On 31 January 2006, CVC and SLEC notified an agreement whereby CVC will acquire sole control of SLEC.

The Commission's extensive market investigation showed that the proposed acquisition by CVC of SLEC could significantly reduce competition as regards the selling of the TV rights to these events in Italy and Spain, i.e. the countries within the EU where these events are most popular. In addition, concerns were raised that in Member States where MotoGP is less popular than Formula One, CVC might bundle the TV rights for both events.

To address the Commission's concerns, CVC has committed to divest its subsidiary Dorna in its entirety. This will eliminate the only overlap in the parties' activities and remove possible concerns regarding the bundling of broadcasting rights.

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