Deal creates Europe's second largest TV group
BERLIN – ProSiebenSat 1, Germany’s biggest TV group, has taken over Luxembourg-based European broadcaster SBS for e3.3 billion ($4.44 billion).Deal, announced Wednesday , creates a pan-European broadcasting company that will be second only to the Bertelsmann-owned RTL Group. ProSiebenSat 1 and SBS are both majority-owned by private equity firms KKR and Permira, which have been eager to merge the two since buying the Ger-man group earlier this year from a consortium led by Haim Saban for $4 billion. The new company, which will continue to bear the name ProSiebenSat 1 Media, will be headquartered in Munich. Active in 13 European countries, the com-pany will operate 24 free TV stations, 24 pay TV channels and 22 radio networks, among other assets. ProSiebenSat 1’s reach will expand to more than 77 million European TV households. RTL has 38 TV and 29 radio stations in 10 countries. ProSiebenSat 1 topper Guillaume de Posch will remain CEO of the new company, while SBS chief exec Patrick Tillieux has been named ProSiebenSat 1’s new chief operating officer. Describing the acquisition as an investment in growth, de Posch said the move would allow the group to further diversify revenue sources, expand into new markets and invest in additional channels, online services and content creation. “It is all about content,” de Posch stressed. “We will achieve a greater critical mass, which will allow us to produce a broader selection of high-quality pro-gramming throughout our European footprint.” The merger will also bring major savings and increased earnings. Company aims to boost its operating profit margin from 22% to between 25% and 30% over the next few years. Overall revenues are expected to rise by 48% to $4.2 billion, while operating profit is expected to grow by 43% to $930 million. In addition, synergies from the merger are expected to reach $110 million-$120 million a year in savings and increased revenue potential. “We’ll share resources on a groupwide basis, leverage our purchasing and sales power, adopt best practices and centralize a number of functions,” said Til-lieux. Dutch publishing group Telegraaf, which held a 20% stake in SBS, now has an option for a 6% share in ProSiebenSat 1, leaving KKR and Permira with 44.7%, Berlin-based publisher Axel Springer with 12% and 37.3% in public free float. With no need of antitrust approval for the deal, the transaction will be completed by the beginning of July.
Want Entertainment News First? Sign up for Variety Alerts and Newsletters!