NEW YORK Time Warner Inc (TWX.N) will invest $241.5 million in Central European Media Enterprises (CETV.O), the companies said on Monday.
The investment will give Time Warner a 31 percent stake in CME, a broadcaster in seven European countries, including Bulgaria, Croatia and the Czech Republic.
Time Warner will receive 19 million CME common shares -- 14.5 million Class A shares at $12 each and 4.5 million shares of Class B shares at $15 each.
Under the agreement, CME founder and nonexecutive Chairman Ronald Lauder will vote Time Warner's shares for at least four years, subject to certain exceptions. Time Warner will also have two seats on CME's board.
The transaction is expected to close before the end of the second quarter.
In a separate deal, Time Warner's Warner Bros movie studio has formed a partnership with CME to launch and operate Warner-branded television channels in the Central European company's territories. The channels will feature international films and television series, including titles from Warner Bros' library.
Time Warner which is set to receive up to $9.25 billion from the spinoff of its cable unit, has said that it would consider international acquisition targets.
"While the (Central European) region has been experiencing the impact of the global economic crisis, we believe CME is ideally positioned over the long term as Central and Eastern Europe returns to significant growth and the media sector in these countries continues to evolve," said Time Warner Chief Executive Jeffrey Bewkes in a statement.
(Reporting by Yinka Adegoke; Editing by Lisa Von Ahn)