A new German TV giant is to be born following the merger of SAT1 and ProSieben (Pro7) Media which was announced today.
The new group, ProSiebenSAT1 Media, which overtakes CLT-Ufa's RTL grouping, will be floated on the stock exchange later this year, but remain controlled by the Kirch group.
With an estimated market value of Euros11bn, the group will also include the Kabel 1 entertainment channel and round the clock news service N24. Proforma turnover is stated at Euros2bn and pre-tax profit Euros200m. The companies say that by creating a family of related channels with audience share of about 25% they will improve efficiency, eliminate overlap and boost advertising and programming co-operation.
Urs Rohner, current chief executive of Pro7, will head the new ProSiebenSAT1 Media with Pro7's finance director Lothat Lanz becoming chief financial officer. SAT1 managing director Fred Kogel is expected to quit executive management and take a seat on the supervisory board.
The deal sees ProSieben shareholders gain 72% of the company and SAT1 investors the remaining 28%. This means that KirchMedia, which currently owns stakes in both groups, will hold 52.5% of the new company. Publisher Axel Springer swaps its 41% stake in SAT1 for an 11% holding in ProSiebenSAT1 Media and some 36% will be in free float (Screendaily, June 26). The transaction may not be completed until the end of the year by which time the German government is expected to have introduced new tax rules on capital gains.
In related shareholder moves, retail giant Rewe exchanges its 41% holding of Pro7 ordinary shares for 6% of KirchMedia. Fonds Capital Research's interest in KirchMedia moves to 3%, Thomas Kirch's moves to 6.9% while Fininvest, Prince Al Waleed's Kingdom Holding and investment bank Lehman Brothers each move to 2.6%.