Deal covers 12 TV nets in Norway, Sweden, Denmark, Finland
LONDONDiscovery Communications is to buy ProSiebenSat.1 Group’s SBS Nordic operations in a deal worth $1.7 billion. The acquisition of SBS Nordic includes 12 television networks in Norway, Sweden, Denmark and Finland. Deal will expand Discovery’s brand portfolio by adding general entertainment, scripted and sports programming to the company’s services for the first time. The transaction is subject to regulatory review and is expected to close early 2013. Discovery also announced that its board has approved a $1 billion increase to its existing stock repurchase program. Move follows Thursday’s news that Discovery is negotiating to take a 20% stake in French media group TF1’s pan-European sports channel Eurosport. “SBS Nordic has a fully distributed portfolio of dual revenue stream networks with a terrific management team that will expand Discovery’s footprint across the Nordic region, which includes some of the most well-penetrated and stable TV markets in the world,” said David Zaslav, president and CEO of Discovery Communications. He added: “Individually, and taken together, the acquisition of SBS Nordic, our pending strategic partnership with TF1 through the acquisition of a minority stake in Eurosport, and the increase in our share repurchase program are all complementary to our long-term growth strategy of delivering sustained operating results, creating strong organic growth through investment in content, brands and talent, and returning capital to shareholders.” SBS has the number two television portfolio in Norway with four networks and an overall viewership share of 34%, the number three television portfolio in Sweden with two networks and an overall viewership share of 22%, and the number three television portfolio in Denmark with four networks and an overall viewership share of 19%, said Discovery. SBS Nordic’s operations include two networks in Finland and 19 radio stations, including what Discovery said was the leading radio portfolio in Sweden, plus several digital brands. “The acquisition of SBS Nordic is a continuation of Discovery’s more than 20-year strategy of investing internationally to build the most extensive global footprint in media, which now includes 153 networks in 217 countries and territories,” said Mark Hollinger, prexy and CEO of Discovery Networks International. In a conference call with journalists, Zaslav described the Nordic deal “as the largest in Discovery’s history.” He said the move would position Discovery strongly to continue to grow its business internationally, but declined to specify when the overseas biz would overtake revenues from U.S. operations. “We are still doing nicely in the U.S.,” said Zaslav. However, competing with around 200 channels in the U.S. was a different order to competing with on average of 50 in the Nordic region. At the moment, more than a third of Discovery’s revenues hails from overseas, but it seems only a matter of time before the international biz overtakes activities in the U.S. Regarding the TF1 stake in Eurosport, Zaslav said that Discovery has an option to own the holding fully within five years. With slow growth in the U.S., today’s acquisition is another part of Zaslav’s strategy of expanding overseas. He has indicated he spends about 40% of his time on the international business. “We’re the best international media company,” making more coin abroad than others, he told an investor conference earlier this month. Earlier this year, he said that Discovery’s “number one target” for acquisitions is international space. He added that assets like the SBS Nordic webs and Eurosport were “hard to find.” “We’ve grown our international business from 2007, (when) we were making $250 million,” he said. “This year, we’ll make significantly more than $700 million.”
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