The European Union is set to launch an investigation into Liberty Media (NASDAQ:FWONA)'s acquisition of the MotoGP World Championship, a deal valued at 3.5 billion euros ($3.67 billion). Officials from the EU's antitrust division, led by the new antitrust chief Teresa Ribera, have expressed concerns that the merger could potentially reduce competition in the broadcasting and streaming markets, as it would consolidate two major motorsport brands.
Liberty Media, which has been expanding its motorsport portfolio, announced in April its intent to acquire approximately 86% of Dorna Sports, the parent company of MotoGP. The remaining 14% will stay with Dorna's current management. This agreement places the enterprise value of Dorna/MotoGP at 4.2 billion euros, with an equity value of 3.5 billion euros.
The EU officials are reportedly preparing to escalate their probe to a phase 2 investigation by the current deadline of December 19. It should be noted that the decision is still in draft form and could be revised.
This is not Liberty Media's first foray into motorsports. In 2016, the company completed a $4.4 billion acquisition of Formula One from a consortium led by CVC Capital Partners (WA:CPAP). More recently, last month, Liberty Media revealed plans to spin off most of its assets, keeping Formula One and other related sports investments. This move is part of a strategy to enhance its focus on motorsports.
At the time of reporting, Liberty Media had not issued a response to the potential EU investigation.
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