Discovery Strikes 2 Deals in Bid for International Growth
Discovery Communications struck two deals on Friday aimed at expanding its reach in Europe, including buying the Nordic arm of the German broadcaster ProSiebenSat.1.
The deal for SBS Nordic, which has an enterprise value of $ 1.7 billion, will give Discovery 12 television networks and several radio stations, expanding the company’s reach in a fast-growing market. Discovery, known for documentary shows, will also acquire its first-ever portfolio of scripted and sports programs.
Discovery, based in Silver Spring, Md., also agreed to pay about $ 221.6 million to take a 20 percent stake in Eurosport, the pan-European sports network owned by France’s TF1. The American company has the right to raise its stake up to 51 percent after two years, and eventually has the chance to buy all of Eurosport from its French partner.
Discovery also agreed to increase its existing stock buyback program by $ 1 billion.
The deals are aimed at furthering Discovery’s reach into international markets, which have been the company’s fastest-growing business. International networks generated about $ 1.5 billion in revenue last year, up 16 percent over the prior year. That was faster than the company’s core domestic operations, which reported an 11 percent rise in revenue during the same period.
“It’s serendipitous to have two important deals come together at the same time,” David Zaslav, Discovery’s chief executive, said on a conference call with analysts on Friday.
Citigroup and the law firm DLA Piper advised Discovery on the SBS Nordic transaction.