PARIS (Reuters) - Leading French broadcaster TF1 will combine with second-ranked rival M6 under a deal announced on Monday by their respective owners Bouygues and RTL Group, a division of Germany’s Bertelsmann.
The tie-up will create a new French market leader with 3.4 billion euros ($4.13 billion) in revenue and Bouygues as its 30% controlling shareholder, the companies said in a joint statement marking the start of exclusive negotiations.
The new TV group will use its increased clout to develop a new digital platform for streaming and subscription-based video on demand - responding to pressure on national broadcasters from Netflix and other online services.
By combining France’s top two broadcasters, the deal also promises to shake up the French audiovisual and advertising markets. It is expected to close towards the end of 2022, subject to approval by competition and broadcasting authorities.
“Consolidation is absolutely necessary to ensure the French public and industry continue to play a major role in the face of tougher international competition,” said M6 Chief Executive Nicolas de Tavernost, who was named to lead the new company.
The deal, reported earlier on Monday by French daily Le Figaro, resolves a battle for M6 that began late last year, when Bertelsmann approached potential buyers for its 48% stake. Rival bidders included Vivendi, Italy’s Mediaset and French telecoms tycoon Xavier Niel.
M6 shareholders will receive a 1.50 euro exceptional dividend as part of the transaction, which sees 2.1 TF1 shares exchanged for each M6 share. Bouygues will then pay 641 million euros to acquire a further 11% of the new company from Bertelsmann, leaving the German group with a 16% holding.
Bouygues will be the “exclusive controlling shareholder” of the combined group, according to the companies’ statement, with four seats on its 12-strong board to Bertelsmann’s two.
The combination, which is also subject to shareholder approvals, will generate 250-350 million euros in annual synergies within three years, they also said.
($1 = 0.8227 euro)
Reporting by Laurence Frost and Gwenaelle Barzic; editing by Jonathan Oatis and Richard Pullin
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