Changing the channel – European TV M&A at inflection point as deal volume down

Data Insight Dealspeak 29 April

Changing the channel – European TV M&A at inflection point as deal volume down

As the US broadcast industry winces at Warner Bros Discovery’s [NASDAQ:WBD] ill-starred launch of CNN+, which lasted just a month, European TV specialists’ eyes are on the fate of Channel 4.

The UK government is reportedly considering privatising the asset by way of a dual-track disposal, with a London listing as an alternative to a trade sale. The government wants to realise GBP 1bn from the process, as reported.

If completed, Channel 4’s disposal would be one of a dwindling number of deals in the European broadcasting space, where there have been 48 deals since the start of 2021, with a total value of EUR 8.6bn, Dealogic data show. Although annual total value has bounced around, volume is in long-term decline; the number of deals has fallen far from the 102 booked in 2015.

Still buffering

Deal activity in Europe still mostly involves traditional TV-infrastructure and media groups buying one another. Only last month, Iliad [EPA:ILD], the owner of Polish telco Play Communications, bought Polish cable operator UPC Polska from cable-and broadband group Liberty Global [NASDAQ:LBTYA] for EUR 1.5bn.

At a much lower price, last June saw the takeover of tower infrastructure belonging to PT Portugal by Cellnex [BME:CLNX] -backed CLNX Portugal. In that deal, 223 macro-sites and 464 micro-sites changed hands for EUR 209m.

So, too, have most other recent deals been for less than EUR 1bn. Among them are the sale of RTL Group to Belgian media companies DPG Media and Groupe Rossel for EUR 250m. RTL operates the main free TV channels in French-speaking Belgium, as well as radio stations, a news website and a streaming service.

Depending on who buys Channel 4, the deal could be a potential step change for European broadcasting. In the US, TV and internet firms are racing to build the biggest streaming service; the ground is starting to move here, too. The biggest deal last year was the EUR 2.2bn combination of French media giants M6 [EPA:MMT] and the Bouygues-controlled Groupe TF1 [EPA:TF1], which – if regulators approve it –would make a media giant spanning TV, radio, digital, content production and technology.

Also in an attempt to build a streaming behemoth for European audiences, FuboTV [NYSE:FUBO], a sports-first live-streaming platform, recently bought one of France’s main live-TV streamers, Molotov, for EUR 164m. Early last year, the entity that is now Warner Bros Discovery bought a 35% stake in BluTV, the biggest Turkish-owned subscription-based video-on-demand platform.

In Switzerland, meanwhile, CH Media and Sunrise UPC signed a long-term strategic partnership. Sunrise took a 20% stake in CH Media, with the proceeds to invest in the expansion of CH Media’s Swiss streaming service oneplus.

New content

Traditional TV and media assets are likely to feature among the top deals in the sector this year. MediaForEurope, a Netherlands-based media group formerly known as Mediaset, recently launched a bid for the 44% of Mediaset España [BMAD:TL5] it does not already own, valuing the outstanding stake at almost EUR 1bn.

As content spreads across new platforms, though, new opportunities will arise. Streaming business Mavshack is reportedly hunting for acquisitions, both in its Swedish home market and abroad. Deezer, a France-based music-streaming platform, which this month merged with blank-cheque vehicle I2PO [EPA:I2PO] for EUR 1.05bn, is also seeking M&A targets, a source told this news service.

Meanwhile, telecoms-infrastructure group Telecom Italia [BIT:TIT] is exploring a breakup. Its streaming service, TIM Vision, could be acquired by media group Vivendi [EPA:VIV], as reported.

Stay tuned

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