Mexico. The Federal Institute of Telecommunications, IFT, approved the contract for the sale of Fox Sports shares in Mexico, in accordance with the provisions of the Resolution issued in March 2019, in which conditions were imposed on the concentration between Disney and 21CF.
The sale of the Fox Sports business in Mexico results from the conditions imposed by the Plenary of the Institute to Disney and 21CF on March 11, 2019, among which is the sale of the Fox Sports business in Mexico to a third party independent of Disney/21CF, on viable and competitive terms, in order to correct the risks in the relevant market of provision and licensing of audiovisual content (programming channels, packages of channels and programs) to restricted television and audio service providers (STAR), in the programmatic category of Sports.
In this sense, the Plenary approved yesterday the contract for the sale of shares presented by the Disincorporation Agent on May 21, 2021, in accordance with the provisions of paragraph 8.4.7.4 of the Resolution, concluded between subsidiaries of 21CF, and Grupo Lauman.
As part of this disincorporation procedure, on May 14, 2021, the Plenary of the Institute agreed that Grupo Lauman meets the eligibility criteria established in paragraph 8.4.7.1. in relation to paragraph 8.4.9.15 of the Resolution, in the sense that:
- It is independent of Disney/21CF and the persons belonging to its economic interest group;
- You have not had a previous business relationship with Disney/21CF that puts at risk the Object of disincorporation and/or the process of competition and free competition in this relevant market and related ones;
- Has the financial capacity and incentives to acquire and operate the Fox Sports business in Mexico, as well as to conclude properly and immediately with the Disincorporation;
- Has the ability and incentives to compete independently in the relevant market, in a viable and competitive manner;
- In the event that it acquires the Fox Sports business in Mexico, this does not generate concentration phenomena contrary to the public interest or competition risks in the relevant and related market, and
- Does not delay or may delay the disincorporation process.
The Plenary determined, among others, that in the contract of sale of shares concluded between the subsidiaries of Grupo Lauman and 21CF it was not identified that it contains elements or clauses that may generate risks in matters of economic competition, and it is expected that the consummation of said contract in its terms would result in the transfer of the Fox Sports business in Mexico in progress, viable, competitive and independent of Disney/21CF, at a level comparable prior to that operating prior to the closing of the Disney/21CF transaction.
Likewise, the Plenary determined that the concentration notified by Grupo Lauman and 21CF is not expected to have or may have the object or effect of conferring substantial power on the economic interest group (GIE) of Grupo Lauman, nor to establish barriers to entry, prevent third parties from accessing the markets and services analyzed and/or facilitate the exercise of conduct prohibited by the LFCE, for the following:
- As a result of the Disincorporation Operation, Grupo Lauman's GIE would acquire the Fox Sports business in Mexico.
- Grupo Lauman's GIE and Fox Sports' business in Mexico participate in different markets. Fox Sports in Mexico participates in activities related to the provision and licensing of channels and programs in the programmatic category of Sports, while the GIE of Grupo Lauman participates in various activities, including the provision and sale of equipment, facilities and services for the production and transmission of audiovisual content (Related Equipment Market, facilities and services), as well as the provision and licensing of restricted channels in the programmatic category of News.
- In the event that Grupo Lauman acquires the Fox Sports business in Mexico, it would vertically integrate its activities in the Related Market of equipment, facilities and services, with the activities that the Fox Sports business in Mexico carries out in the relevant market of provision and licensing of audiovisual content (programming channels and channel packages) in the programmatic category of Sports to STAR operators in Mexico (Relevant Market).
