Is a blog without comments still a blog?
Watch out for the virtual freemasons

2006: Mergers, acquisitions and plain war

The Scandinavian media landscape changed irrevocably in 2006: Orkla sold its media arm to a British company built on borrowed money, the region's media giants were busy consolidating and expanding internationally, and Swedes and Danes were bombarded with freesheets from left, right and centre

In what has been dubbed 'The darkest day in Norwegian media history', former Mirror boss David Montgomery bought Orkla Media, but had to borrow money from Orkla to finalise the deal - aggravating Orkla journalists already aggravated that Orkla had decided to sell to a foreigner. To add insult to injury, it was later revealed that Orkla Media executives had received generous bonuses to stay onboard throughout the sales process.

In Sweden, Modern Times Group (MTG) scooped up close to a dozen TV-channels in eastern Europe, but paused its expansion eastwards to acquire Norway's biggest commercial radio company P4. The Swedes do of course have a historic preference for eastern dominions, and Hans Holger-Albrectht, MTG's CEO said: "Norway is also east for us, it depends on where you stand." Bonnier strengthened its positions in the east as well, but in two raiding trips across the Atlantic it also acquired Weldon Owen Publishing and half of World Publications. After a few years of consolidating its Nordic position, the Swedish media giant signalled it was hungry for more international acquisitions, especially in the US.

Merger mania
Norwegian media group Schibsted moved out of TV, but consolidated its leading position online. Kjell Aamot, Schibsted's CEO, was crowned the king of internet in Sweden, and, following favourable mention in The Economist, Schibsted's successful online transition – its biggest Norwegian online paper had a staggering 42 per cent profit margin in 2005 - was put on the curriculum at Harvard University. The company outmanouvered Montgomery by forging a gigantic merger, dubbed an acquisition by Mecom, between Schibsted's Aftenposten and southern Norway's three biggest regional papers. The merger, which has yet to be granted regulatory approval, prompted Mecom to sell its shares in the profitable big regionals, a move Dagbladet's editor-at-large, John Arne Markussen, predicted will weaken Mecom's ability to defend its local positions in the long run.

Meanwhile, Baugur-controlled Dagsbrun, who lost the battle for Orkla Media, challenged Montgomery and others to freesheet war in Denmark. The Icelandic company sent shivers down the spine of Danish media proprietors when it announced plans to launch its quality, door-to-door distributed free newspaper, highly successful on Iceland, internationally – with Denmark as the first stop. It provoked a freesheet war on an unprecedented scale, and prompted Danish trade journal Journalisten to send a representative to Iceland to investigate the actual finances of a conglomorate whose intricate company structure makes such things somewhat opaque.

Montgomery won the race to bring the first new freesheet to Danish doorsteps, and Icelandic Nyhedavisen got off to a late and bad start, hampered with technical problems and shambolic distribution, but at the end of 2006 it was not looking too good for Montgomery's Dato. Mecom-owned Berlingske Officin already has one well-established traffic distributed freesheet with a distinct profile, Urban, why then sink money into a door-to-door distributed one which had the worst readership figures of all the major freesheets in recent polls? One new freebie has already thrown in the towel, which leaves five, in addition to Nord Jyske's two regional ones. My bet is that Dato will be the next to go, at least that would make most sense if logic has anything to do with it.

Hmm, did I forget anything? Many smaller M&As I'm sure, and of course, Schibsted and Bonnier challenged MetroXpress' freesheet domination in Sweden...


The comments to this entry are closed.