Italy’s Mediaset wants Euro-FTA position

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Italian financial newspaper MilanoFinanza is reporting that Italian TV broadcaster Mediaset is confirming its ambition to create a European FTA player.

Investment bank Exane/BNPP has looked at the situation, and suggests its own key take-aways from the article:

1) Mediaset has been working for over a year to create a European FTA player and is the leading player in the discussion
2) According to the newspaper, this is the only consistent response to the Sky/Comcast deal and the competition from the likes of Netflix and global players.
3) TF1 is said to have stalled the negotiations, also due to ongoing political tension between France and Italy
4) The “German option”, ie Prosieben, is the preferred one as Prosieben is a fully public company – in an aggregation scenario, Prosieben has the most favourable shareholding structure for Fininvest (vs TF1 which belongs at 43,7 per cent to Bouygues)
5) The article mentions that Mediaset & Prosieben has two similar networks and similar sizes. It also mentions that Mediaset Espana would have a role in this European project, as the buy-back announced yesterday could end in a de-listing from the Madrid stock exchange in the case of an international merger.
6) Finally, the article speculates that the new group would have its HQ in the Netherlands, an option also preferred by Fininvest who thinks that it may be better safeguarded by local lows in its battle with Vivendi.

The bank adds: “The article is quite unclear regarding the terms and the structure of any deal. We believe that consolidation is a natural path for an industry facing structural challenges and increasing competition from global players (Netflix & co). However, we remain sceptical on consolidation at the European level as 1) we see limited synergies and 2) the cultural difference brings further integration risk. To mount any kind of challenge to the global OTTs a continental champion would need to be created but the fact that France is excluded from these conversations shows just how hard this project might be.”


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