euro news_news 26/02/2015 10:22 Page 7
Cabsat deals dominate Euro media M&A
ccording to new PwC analysis of
M&A deals across the European
entertainment and media
industry in 2014, the rebound in deals
value since the post financial crisis
trough has been far
more marked than
the recovery in deal
volumes.
Aggregate media
deal value in 2013 and
2014 was three times
the annual levels of
2010-2012 – an
increase that reflects
the return of
‘megadeals’ in the
media space over the
past two years,
particularly in the
cable and satellite
sector.
According to Mark Maitland, TMT strategy
partner at PwC, the total value of European
entertainment and media deals in the second
half of 2014 was the largest ever seen in a half
year period. Megadeals completed in 2014
included Liberty Global’s acquisition of Ziggo,
and BSkyB’s acquisition of Sky Deutschland
and Sky Italia.
Cable and satellite deals dominated the top
ten European deals in 2014, accounting for the
six largest deals – compared to only three
sizeable cable and satellite deals in 2012-13.
The top 10 UK entertainment and media deals
were led by transactions in the television,
publishing and marketing services sectors.
The rankings also reveal contrasts between
the UK and Europe. European deals are
A
BT, Three consolidate
UK telco sector
The early part of 2105 has
seen two major M&A deals
that will see consolidation in
the UK mobile network
sector. BT has agreed terms
to acquire mobile operator
EE – a joint-venture of
France's Orange and
Deutsche Telekom - for £12.5
billion (€15.8bn). Separately,
Spain's Telefónica has agreed
that Hutchison Whampoa –
the operator of the Three
network in the UK – will
acquire O2 UK, Telefónica’s
subsidiary in the United
Kingdom, for £10.25 billion
14 EUROMEDIA
dominated by corporate trade buyers while in
the UK, private equity has a more significant
presence in the top ten, such as Apax Partners’
purchase of the remaining stake in Trader
Media Group (now Auto Trader), and other
large deals completed by BC Partners, Cision
(GTCR-owned) and Lake Capital Partners.
Despite corporates accounting for the
largest European deals in 2014, the general
trend is that private equity investors are
continuing to show strong interest in media
assets, particularly in the UK market.
According to PwC, three key themes are
driving M&A activity:
1. Continued transformation of television
and content
During 2014, ongoing shifts in TV viewing
and the ownership of content and
distribution drove M&A activity across
Europe, through a combination of tripleplay deals, cross-border plays by US majors,
and diversification moves by TV channels.
2. Digital remains a key M&A driver
in cash
(€13.5bn).
BT says the
combination
will provide
customers with
innovative, seamless services
that combine the power of
fibre broadband with WiFi and
advanced mobile capabilities.
Integrating the two companies
will accelerate BT’s mobility
strategy and increase BT’s
capacity for future investment
and product innovation as it
continues to build world-class
digital infrastructure in the UK.
BT expects to generate
revenue synergies by providing
a full range of communications
Digital technology is at the heart of media
and M&A for several reasons. It creates
change and demands investment; it makes
businesses buy new capabilities in search of
growth; and it triggers disposals of nondigital businesses to
raise funds for digital
acquisitions and
spending.
3. A growing appetite
for B2B data and
events businesses
Having weathered the
downturn more
robustly than
business-to-business
(B2B) magazines, B2B
events and B2B digital
data services have
now returned to
growth, and are
attracting acquisition interest both from PE
investors and corporates.
Nick George, head of TMT transaction
services at PwC, said the three themes
highlighted would continue to underpin much
of the E&M deal activity across Europe in 2015.
“We anticipate activity will be driven by
consolidation, digitisation and portfolio
restructuring. We are confident that the
European media deals environment in 2015
will be every bit as exciting as 2014 and
potentially more so, even given an uncertain
macroeconomic backdrop in the Eurozone. We
expect growth as media companies continue to
invest in digital, with a further positive factor
that private equity investors are continuing to
raise funds and show active interest in
Europe’s media sector,” he advised.
services to
the
combined
customer
base. This
includes BT
selling its broadband, fixed
telephony and pay-TV services
to those EE customers who do
not currently take a service
from BT. BT also expects to
accelerate the sale of
converged fixed-mobile
services to BT’s existing
consumer and business
customers and offer new
services, using both
companies’ product portfolios,
skills and networks. BT expects
to generate revenue synergies
with a total net present value
of approximately £1.6 billion.
Telefónica says its
announcement occurs at a
decisive moment for the
company, following a period
during which it has been
proactively managing its
portfolio of assets, significantly
reinforcing its position in key
markets (consolidating
Germany, acquiring GVT in
Brazil - pending regulatory
approvals) and exiting others
and, therefore, increasing its
potential for future growth.
BT had in November
admitted it was negotiating to
buy 02 but then switched its
attention to EE.