As rumoured in recent days, Viacom has agreed a deal with Spanish telco Telefónica to acquire Televisión Federal (Telefe), one of the main free-to-air channels in Argentina, by Viacom International Media Networks (VIMN). The transaction has been concluded for a total amount of $345 million (€321.6m) in cash.
The transaction adds one of Argentina’s most popular television networks and biggest content producers to Viacom’s fast-growing 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 programmes 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.
Bob Bakish, Acting President and Chief Executive Officer of Viacom 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.”
Antonio Marti, Director of Business Transformation and Planning at Telefónica’s Chief Commercial Digital Office said: “Telefe is the market leader which has demonstrated strong operating performance in recent years. This transaction is consistent with Telefónica’s asset portfolio management strategy – focused in value creation and strategic positioning – and it allows the Company to concentrate even more on its principal activities in Argentina: the development of the telecommunications sector and the most advanced technologies in connectivity to drive the digital society of the future. Thus, Telefónica ratifies its strong commitment to a connected Argentina, which plays a leading role in the digital revolution.”
Since its arrival in Argentina twenty-six years ago, Telefónica, which manages 26.8 million subscribers in the country, has invested approximately €15 billion in infrastructure, including spectrum capital expenditures. Between January and September 2016, Telefónica Argentina’s investments have increased by almost 35 per cent 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.
Under the terms of the agreement, Viacom will acquire all of Telefe’s brands and assets, including:
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.