Pearson, the British media group, has taken a big step forward in its global TV ambitions by agreeing to buy international television producer Grundy Worldwide for $279 million.
The surprise deal, which was initiated by Greg Dyke, the newly appointed chairman and chief exec of Pearson TV, means Grundy has aborted its plans for a public offering on the New York and Australian stock exchanges.
“We are buying a major television business that will fit extremely well with our existing interests,” said Dyke. “This purchase transforms us from a national to an international producer.”
“Grundy has a legendary reputation for efficient financial management of its productions in different markets, and I see the acquisition as a vital ingredient in our overall strategy,” he said.
Reg Grundy, the Australian founder and 85% shareholder of the company that bears his name, said, “Clearly this has been one of the most important decisions of my life. There are benefits in remaining an independent company, but in the current fast-changing world of global media, the advantages of teaming up with a company the size and scope of Pearson are self-evident.”
Strong in Oz
Grundy Worldwide specializes in producing local versions of long-running soaps and gameshows around the world. It is particularly strong in Australia, where it started 37 years ago, and in Europe; its presence in North America is relatively weak.
Pearson’s existing TV production interests include Thames TV, the U.K.’s largest indie, as well as Financial Times TV, a spinoff from the newspaper, which Pearson also owns. It has minority stakes in several terrestrial and satellite broad casters in the U.K., including the ITV company Yorkshire Tyne Tees TV, British Sky Broadcasting, UK Gold and UK Living. It is also part of a consortium bidding for the U.K.’s Channel 5 license.
Internationally, Pearson has a strategic alliance with the BBC to launch cable and satellite channels around the world, starting earlier this year with two Euro webs. It recently acquired a 10% stake in Hong Kong broadcaster TVB, which also involves an alliance in India with TVB and the Hindustan Times.
Pearson identified three main reasons for buying Grundy: Grundy’s good financial health; its experience at adapting shows to different local markets; and its management skills and library, which will help expand Pearson’s international broadcasting interests. Dyke highlighted Asia as a region where Grundy’s expertise would be particularly valuable in helping Pearson to establish its presence.