Viacom has beaten off competing bids to acquire Argentinean broadcaster Telefe. In a deal closed on 15 November, the US group agreed to acquire Telefe from Spain-based telco Telefónica for $345 million. Viacom faced competition from Turner Broadcasting and Cisneros, according to press reports in the last few months.
Telefe is one of the most popular free-to-air broadcasters in Argentina, reaching 95% of the population, with an average share of viewing of 33% in the year to date, according to a company statement. The group includes eight free-to-air channels operating at both regional and national basis, four online platforms and 12 production studios. Telefe also has a library of 33,000 hours of content distributed to over 100 different territories. Alongside the free-to-air channels, Viacom has also acquired Telefe International, a pay TV channel available in 17 countries worldwide. The group airs a wide range of programme genres, including live games from the Primera Division, the top tier of the national football league.
Viacom will pay cash to complete the transaction, which expected to close next year, subject to approval from regulators. Telefonica said the disposal was part of a plan to refocus its activity in Argentina on its telecoms businesses.
Argentina is the first country in Latin America where Viacom will operate free-to-air channels. Before the acquisition of Telefe, Viacom operated several networks only on pay TV platform, a portfolio included channels like Nickelodeon, MTV and Comedy Central.
The strategy adopted by Viacom in the last five years is clear analysing the evolution of the subscribers by channel in Argentina. Viacom's subscriber base has been increasing rapidly since 2010. Viacom has increasing the number of networks in its bouquet from only three channels in 2010 to 12 channels now.
In the same period, Viacom has consolidated its position in Central and South America, especially in Brazil, Mexico, Chile and Colombia. IHS TV Channel Intelligence estimates there are currently 56 million subscribers to MTV in the region this year, and a similar number for Nickelodeon. Those figures show that Viacom has a consolidated presence in the pay TV market in Latin America.
The decision to take over Telefe could represent a turning point in Viacom’s strategy for the future, which allows Viacom to penetrate more deeply into the Argentinian market. Telefe is also a major producer, agreeing a two-year development deal with FremantleMedia earslier this year. Through this acquisition, Argentina will be the first country in Latin America where the American operator will have a free-to-air channel; it might not be the last.