Market Watch

ProSiebenSat.1 Agrees Sale of Benelux Operations

April 20, 2011

Tim Westcott Tim Westcott Director – Research and Analysis, Programming, IHS Markit
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ProSiebenSat.1 Group has agreed to sell its TV interests in Belgium and the Netherlands to a consortium of international media companies in a deal valued at €1.2bn. The agreement follows a strategic review of its investments in Benelux and the Nordic countries initiated by the group earlier this year with the object of reducing its debt.

In Belgium, the VT4 and VijfTV TV channels will be sold to Finnish media company Sanoma, and Belgian companies Corelio and Waterman & Waterman. Sanoma's share of this deal is 33 per cent. In the Netherlands, Sanoma will own 67 per cent of SBS Nederland, which operates the SBS6, Net 5 and Veronica channels and publishes magazines. Talpa Media Holding will own the remaining shares. The Dutch deal is subject to clearance by competition reguilators as Talpa already owns a 26 per cent stake in RTL Nederland.

ProSiebenSat.1 said the value for both transactions is €1.225bn - a multiple of 10.6 times full-year 2010 adjusted EBITDA of €115m. Sales for its Benelux operations were reported as €407.4m in 2010.

The Munich-based company said its strategic review is now complete and that it will therefore retain its interests in the Nordic region. It will also keep the production business in Belgium and the Netherlands owned by its Red Arrow Entertainment division.

ProSiebenSat1's acquisition of SBS Broadcasting in July 2007 transformed it into a multinational media company at a stroke, on a par with Luxembourg-based RTL Group. However the deals also saddled ProSiebenSat1 with debts which stood at a net total of €3bn at the end of last year.

In June 2008, the Nordic pay-TV business C More Entertainment was sold to Sweden's TV4 for €320m. This was a less strategically important business than the ad-supported networks in Benelux, the Nordic countries and central and eastern Europe; however the extent of ProSiebenSat1's debts made the sale of another part of its portfolio unavoidable. The company's main shareholders are funds advised by private equity groups KKR and Permira.

The SBS acquisition also came as western Europe was on the verge of a major ad recession. The TV advertising market in both Belgium and the Netherlands recovered last year to a total of €1.468bn, up from €1.409bn in 2009), which made the strategic review well-timed. IHS Screen Digest forecasts a 12 per cent improvement in the Benelux TV ad market over the next five years, in line with the overall trend in western Europe.

Local ramifications of the sale will be greatest in the Netherlands. Sanoma, which owns Finnish daily newspaper Helsingin Sanomat and free-to-air channel Nelonen, is a newcomer to the market. However, Talpa Media operated a TV station for a couple of years before merging them with RTL Nederland. Talpa, owned by Endemol founding father John de Mol, supplies several programmes to RTL, which is reportedly furious with Talpa's decision to buy into its main competitor.

Find Out More > IHS Screen Digest Television Intelligence

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