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UPDATE 2-Any demand to sell M6 or TF1 flagship channels would be a deal breaker -TF1 CEO

(Adds comment on government’s response, paragraphs 8-9)

PARIS, May 19 (Reuters) - Any demand by France’s antitrust watchdog for M6 or TF1 to sell either of their flagship channels as a condition for approving their proposed merger would be a deal breaker, TF1 boss Gilles Pelisson said on Wednesday.

France’s two biggest private TV groups announced their tie-up plans on Monday in what they said was a response to the accelerating challenges from global platforms.

The main challenge for TF1 and M6 and their respective parent companies, French conglomerate Bouygues and Germany’s Bertelsmann, is to obtain clearance from France’s competition authority, as the combined entity would have sway over three-quarters of the country’s TV advertising.

“If there was a demand for a sale of either TF1 or M6 channel as part of the remedies, neither group would accept that,” Pelisson said in a call with analysts.

TF1’s chief executive also mentioned the risk of having the two TV groups’ licence not renewed by the French broadcasting authority CSA as another potential deal breaker.

But Pelisson struck an optimistic tone when pressed by analysts to detail the reasons why he thought the deal could win antitrust approval without having to give up its most prized assets.

He mentioned the approval the watchdog gave for the merger of French retailers Fnac and Darty in 2016 in a decision which took into account the rise of e-commerce and market leader Amazon.

When asked if TF1 had sounded out the French government about the deal ahead of time, Pelisson said that was the case and that the response from the government was positive.

“We did... You may conclude that if we are here this morning... there was favourable welcome to this project,” he said.

Reporting by Mathieu Rosemain; editing by Jason Neely and Louise Heavens

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