The European Commission has approved the previously-announced combination of Canal Digital, Telenor Group’s satellite pay-TV business, with Viasat Consumer, Nordic Entertainment Group’s satellite pay-TV and broadband-TV business, into a new joint venture company. Telenor Group and Nordic Entertainment Group will each hold 50 per cent of the shares of the new company.
The Nordic consumer offering will focus on satellite distributed pay-TV (DTH) and streaming services, as well as IPTV on open fibre networks, and will continue to develop market-leading TV distribution services. The combination is expected to yield annual cost synergies of approximately SEK 650 million (€60.8m), with full effect from 2022. Integration and other related costs are expected to total approximately SEK 900 million.
The new company, which will launch its name and corporate brand following closing and will be headquartered in Stockholm and Oslo, will operate on an arm’s length basis from NENT Group and Telenor Group. It will be an open platform providing content from multiple providers and will serve as an important distribution partner for NENT Group’s Viasat pay-TV channels (to be rebranded as V from June), free-TV channels and Viaplay streaming service, all of which will continue to be owned by NENT Group and be widely available on third-party platforms.
“We are delighted to receive the approval from the European Commission to complete the transaction for creating a new and strong Nordic company within the TV industry,” declared Jørgen C. Arentz Rostrup, CFO, Telenor Group. “The joint venture will combine the respective strengths of Canal Digital and Viasat Consumer, leveraging synergies for the benefit of our customers and shareholders.”
“We are delighted to receive the European Commission’s approval for this game-changing joint venture,” added Anders Jensen, NENT Group President and CEO. “The business and customer rationales are compelling. We are creating a large-scale player that can compete on a Nordic level, make sustained investments in content and technology, deliver even better combined customer offerings, and generate substantial revenue and cost synergies. Our talented Viasat Consumer employees can now look forward to joining forces with the Canal Digital team at the new company, while NENT Group will be able to focus even more on the expansion of our fast-growing Viaplay streaming service. Such innovative partnerships are the way forward for the more traditional parts of our industry, especially at times of acute change such as today.”
“The need for consolidation in the Nordic satellite pay-TV market has been clear for some time,” noted Gabriel Catrina, NENT Group Chief Financial Officer. “This joint venture will create significant value both for customers and owners, while changing NENT Group’s financial profile and further accelerating the growth of Viaplay. It has the potential to become a model for similar partnerships in other parts of the industry.”
The leadership team of the new company will be:
The Board of Directors will have equal representation from NENT Group and Telenor, with a rotating chairmanship.
NENT Group and Telenor will provide a suite of services to the joint venture, including transponder capacity and technology, content and streaming services.
After closing of the transaction, which is expected on May 5th, Viasat Consumer AB will be deconsolidated from NENT Group and will be reported as an associated company. NENT Group will thereafter report its share of the net income of the joint venture as income from associated companies within its operating income. The transaction will give rise to a capital gain for NENT Group, which will be reported within Items Affecting Comparability. Upon closing, a purchase price allocation will be performed that will likely result in the identification of amortisable assets that will impact the income from the associated companies. The amounts are not known at the date of release but will have no cash flow impact.