Bundeskartellamt orders dissolution of WAZ / OTZ merger

The Bundeskartellamt has ordered the dissolution of the merger between WAZ Westdeutsche Allgemeine Zeitungsverlag GmbH & Co. Zeitschriften und Beteiligungs-KG (Essen) and OTZ Ostthüringer Zeitung Verlag GmbH & Co. KG (Löbichau) and threatened to take coercive measures to enforce the order.

WAZ is obliged to sell 40 per cent of its shares in OTZ to an independent third party. If WAZ does not fulfil this obligation within the time limit set by the Bundeskartellamt, the latter will appoint a trustee to effect the sale for WAZ’s account. On expiry of the time limit a trustee is also to be appointed to exercise WAZ’s rights linked with its shares in OTZ without being subject to instructions.

As early as in November 1995 WAZ had acquired a 40 per cent share in OTZ held by the publishing group Rhein-Main GmbH & Co. KG (Mainz). As a result WAZ’s share in OTZ rose to 100 per cent. Although this share increase represented a concentration which was subject to control the acquisition was not notified to the Bundeskartellamt.

On 12 January 2000, once this acquisition had come to its knowledge the Bundeskartellamt prohibited WAZ from taking over the 40 per cent shareholding in OTZ as the concentration had led to the strengthening of the dominant positions held by the WAZ group and OTZ in the reader markets for regional subscription dailies and advertising markets in the distribution areas of the “Ostthüringer Zeitung” and the “Thüringer Allgemeine”.

On 31 January 2001 the Düsseldorf Higher Regional Court rejected an appeal by the parties concerned against the prohibition. WAZ’s appeal before the Federal Supreme Court against the denial of leave to appeal against the decision of the Düsseldorf Higher Regional Court was unsuccessful (decision of 11 December 2001).

Upon this WAZ notified the Bundeskartellamt that it would itself initiate the necessary measures required by law to dissolve the merger. However WAZ has to date not carried out any appropriate divestment measures.

The President of the Bundeskartellamt, Dr Böge, stated: “The Bundeskartellamt’s prohibition decision has been in force for almost two years without WAZ as much as making any serious effort to remove the restraint of competition. The Bundeskartellamt therefore considers it necessary to enforce the dissolution of the illegal merger with coercive measures if necessary, as provided by law.”