FRANCE’S TF1 AND M6 ARE ABOUT TO MERGE AND CREATE A NEW POWERHOUSE

Groupe TF1, Groupe M6, Groupe Bouygues and RTL Group announced that they have signed agreements to enter into exclusive negotiations to merge the activities of Groupe TF1 and Groupe M6 and create a major French media group. According to the companies, “the new group would be well positioned to master the challenges arising from the accelerating competition with global platforms, active on the French advertising market and in the production of quality audiovisual content”.

The merged company would have 2020 Pro Forma revenue of €3.4 billion and current operating profit of €461 million. The shareholders of Groupe M6 and Groupe TF1 would benefit from significant value creation. The synergies potential (EBITA run-rate impact) is estimated at €250 - 350 million per year within three years from closing of the transaction.

Groupe Bouygues would own approximately 30% of the merged entity, which it would have exclusive control over, as part of a shareholder agreement with RTL Group, second largest shareholder with approximatively 16%. Free float would own approximately 54% of the new group of which approximately 29% for the existing float of Groupe M6 and approximately 25% for the existing float of Groupe TF1.

At the day the operation is finalized, the management of the combined group would include members of the current management teams of Groupe M6 and Groupe TF1. Nicolas de Tavernost will be proposed as Chairman and CEO of the merged entity, while Gilles Pélisson will be nominated as Deputy CEO of Groupe Bouygues in charge of media and development.

Gilles Pélisson, Chairman & CEO of Groupe TF1, said: “The merger between Groupe TF1 and Groupe M6 is a great opportunity to create a French total video champion that will guarantee independence, quality of content, and pluralism – values that have long been shared by our two groups. It will be an asset in promoting French culture. Groupe TF1 now approaches a new stage in its development, consistent with the strategic vision developed in the past 5 years”.

Nicolas de Tavernost, CEO of Groupe M6, commented: “The consolidation of the French television and audiovisual markets is an absolute necessity if the French audience and the industry as a whole are to continue to play a predominant role in the face of exacerbated international competition, which is accelerating rapidly. The combination of the two groups' know-how will allow for an ambitious French response. Furthermore, this proposed merger of Groupe M6 and Groupe TF1 is the only transaction offering value creation for all Groupe M6 shareholders”.

Olivier Roussat, CEO of Groupe Bouygues, declared: “The audiovisual market benefits from long term growth. In this context, Groupe Bouygues is pleased to contribute to the creation of a major French media group able to compete with the GAFANs. We are pleased with this major development and partnership which confirm Groupe Bouygues's commitment to the media since 1987. As shareholders with exclusive control over the new group, we will continue to provide it with our full support”.

Thomas Rabe, CEO of RTL Group, concluded: “The proposed merger of Groupe TF1 and Groupe M6 would be a major step in implementing our strategy to create national media champions across our European footprint. It demonstrates how in-country consolidation creates significant value. As a strategic investor, we will be long-term industrial partners of Groupe Bouygues”.

The transaction, which is aimed to close by the end of 2022, remains subject to the approval of the extraordinary general meetings of Groupe M6 and Groupe TF1, which would follow the receipt of the transaction appraisal documentation from the Commissaire à la fusion et aux apports to be designated as part of the transaction. Completion of the transaction is also subject to customary condition precedents in particular the approvals from the antitrust authorities (Autorité de la Concurrence) and media regulator (Conseil Supérieur de l'Audiovisuel).