THE nation's consumer watchdog has given the sale of Television & Media Services' Val Morgan cinema advertising business to Hoyts, Greater Union and Village the green light.
The Australian Competition and Consumer Commission said it had accepted undertakings from the parties, which address the commission's concerns.
"The undertakings should ensure that, in addition to preserving cinema screen advertising in Australia, competition will remain in the cinema industry," ACCC chairman Allan Fels said.
"Without the acquisition, it was likely that Val Morgan would have been placed into administration, and this important source of revenue for cinema exhibitors would disappear."
Under the conditions:
Two of the purchasers will offload their stake in Val Morgan within 18 months of the purchase.
Val Morgan will honour existing contracts with independent cinema exhibitors and offer them new cinema advertising contracts when their existing contracts expire.
Val Morgan will guarantee minimum contractual terms to be offered to independent cinema exhibitors.
The undertakings will remain in force until advertising contracts between Val Morgan and the divesting exhibitors cease to remain in force. Professor Fels said Val Morgan was on the "point of financial collapse", which would have had a significant impact on the provision of advertising to cinemas. He said the ACCC consulted extensively with independent cinema exhibitors and relevant bodies.
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