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Viacom acquires Argentinian FTA channel Telefe for $345 mn
MUMBAI: US conglomerate Viacom and Telefónica have announced the acquisition of Televisión Federal S.A. (Telefe), a free-to-air channel in Argentina, by Viacom International Media Networks (VIMN).
The transaction has been concluded for a total amount of $345 million dollars in cash.
The deal adds one of Argentina’s television networks and content producers to Viacom’s portfolio of international TV networks and digital properties. Telefe reaches 95 per cent of all households in Argentina, a country of 43 million, and has attracted approximately 33 per cent share of viewership year-to-date in 2016.
The network produces more than 3,000 hours of Spanish-language video content each year, including seven of the top 10 programs currently airing locally, and has a library of 33,000 hours of local content.
By combining Telefe with Viacom’s popular pay TV networks, which include MTV, Nickelodeon, Comedy Central and Paramount Channel, this deal further strengthens VIMN’s position in Argentina and Latin America.
With this transaction, Telefónica takes one step further in its asset portfolio management, based on value creation and strategic positioning.
Viacom acting president, CEO Bob Bakish said, “Telefe is an outstanding broadcast and production business, and this acquisition will accelerate our growth strategy in Argentina, one of the most advanced and valuable media markets in Latin America. Viacom has an unrivalled track record of combining free and pay TV networks to deliver strong growth in high-value or high-growth markets, including in the UK and India. Working together with Telefe’s highly successful team, we can strengthen Telefe’s market-leading status in Argentina and expand its presence around the world using Viacom’s extensive global network, potentially reaching hundreds of millions of Spanish speakers across Latin and North America, as well as in other markets.”
Since its arrival in Argentina 26 years ago, Telefónica, which manages 26.8 million subscribers in the country, has invested approximately 15 billion euros in infrastructure, including spectrum capital expenditures. Between January and September 2016, Telefónica Argentina’s investments have increased by almost 35% in comparison with the same period in 2015, with the aim of expanding its communications network and providing its customers with new connectivity and browsing experiences. The above once again confirms the Telefónica Group’s firm commitment to a connected Argentina as a key player in the digital revolution, providing support for locally announced future investments exceeding 36,000 million pesos over three years (2016-2018).
Telefe will fall under the direction of Pierluigi Gazzolo, President of VIMN Americas. The acquisition builds on Viacom’s long and successful track record of investment in Argentina, beginning with the launch of MTV in 1993.
Viacom’s portfolio in the market now includes 12 branded pay TV networks, including Nickelodeon, Nick Jr., Comedy Central, Paramount Channel and VH1, among others, reaching audiences from pre-schoolers to adults; a suite of authenticated TV Everywhere mobile apps; multiple on-the-ground events and experiences; and an extensive consumer products catalogue. VIMN has maintained a local office in Buenos Aires since 1995.
Terms of the agreement
Under the terms of the agreement, Viacom will acquire all of Telefe’s brands and assets, including:
- Telefe in Buenos Aires Capital and Gran Buenos Aires, one of the country’s leading free-to-air networks, initially launched as Tele Once in 1961. The network’s diverse range of programming includes Educando a Nina, Loco x Vos, Susana Giménez, Pesadilla en la Cocina and Telefe Noticias.
- Eight wholly-owned channels in the interior of the country, including Canal Cinco in Rosario, Canal Siete in Neuquén, Teleocho in Córdoba, Canal Ocho in Mar del Plata, Canal Ocho in Tucumán, Canal Nueve in Bahía Blanca, Canal Once in Salta and Canal Trece in Santa Fe
- Telefe Internacional, a pay TV channel seen throughout the Americas and distributed globally to ten million subscribers across 17 countries
- Significant multiplatform presence through applications such as Mi Telefe (My Telefe) and Telefe Noticias (Telefe News), a multi-channel network called UPlay founded by Telefe and an e-commerce partnership with Mercado Libre
- Twelve production studios which have a combined total of 12,000 m2 of production space
- A library of over 33,000 hours of content currently distributed in more than 100 countries in 35 languages.
The acquisition was financed from Viacom’s existing cash balances. The transaction is expected to be accretive to Viacom’s fiscal year 2017 earnings. The transaction is subject to customary regulatory approvals.