BERLIN — Upstart kidvid operator EM.TV & Merchandising is rapidly cleaning up in the German market place, adding to its fast-growing empire a significant stake in Germany’s second-largest rights-trading entity, Tele-Munchen.

Reports of a deal between Tele-Munchen (TMG) and stock-exchange darlings EM.TV, which will take a 45% stake in TMG, had surfaced previously.

Reports suggested that EM paid DM750 million ($396 million) for the stake in local entrepreneur Herbert Kloiber’s shingle.

International operators

The companies will be combining considerable clout in licensing, production and merchandising, and plan to make the most of synergy offered between the two players, which are both established forces in international markets.

EM.TV lays claim to being the market leader in children’s programming, and the European leader in merchandising. The new stake will make it into a leading provider of theatrical and TV programming, and the venture will broaden both companies’ merchandising bases.

Added to EM.TV’s current portfolio of 24,500 half-hours of children’s and family programming will be a further 3,000 animation episodes from TMG’s library.

“This important and strategic acquisition is for our business a further, significant milestone,” said Thomas Haffa, EM.TV’s chairman of the board. “It is our goal following the expansion of our company into the most important and family and youth programmer, and into merchandising, to make the most of the potential offered by the rest of the chain of media products.”

Production power-up

The production side of TMG is set to get a boost through the new partnership. The company has a strong track record co-producing a whole string of U.S. titles such as “12 Monkeys,” “Primary Colors” and “The Relic.” But production traditionally has taken a back seat to its licensing activities, which last year accounted for $166 million of the company’s $220 million revenues.

“Through the combination of these two partners we are opening up new dimensions,” Kloiber said. “I’m convinced of the potential.”

Last month, EM.TV took a 25% stake in veteran film distributor and production outfit Constantin Film, marking its initial expansion beyond its core business of children’s programming.