Just as analysts werepredicting a marked slowdown in media mergers and acquisitions, NBC announcedyesterday it was paying $1.98bn for complete ownership of the number two Spanish-language broadcasting network in the US, Telemundo. The deal reportedly trumped a rival bid from Viacom.

NBC is paying ahuge premium to buy out the interests in Telemundo currently held by SonyPictures Entertainment and Liberty Media, who between them paid just $539m fortheir combined 75% stake in four years ago. NBC is paying half in cash, therest in stock from its parent company General Electric; in addition it is assumingsome $700m in Telemundo debt.

The deal, which was characterized yesterday by NBC president Andrew Lack as "the largest in NBC's history", comes despite a severedownturn in the overall advertising business in the wake of the dot-comimplosion and the recent terror strikes on the US.

But while other mediasegments have seen sharp declines in revenues, Spanish-language networks led byUnivision and followed by Telemundo have continued to see an upsurge inbusiness. Indeed NBC chief Bob Wright said yesterday he expected the deal to add up to $600m in revenues and $250m of cash flowwithin two years.

Hispanics are the nation'sfastest-growing segment of the population, representing around 13% of theAmerican total, and are expected soon to be the largest minority group. Duringthe 1990s the US Latino population grew more than 50% to 35.3m. NBC yesterdaycited industry research predicting that, by the end of this decade, Hispanicbuying power should approach $1 trillion, up from a current $440bn.

Telemundo president and CEOJim McNamara and COO Alan Sokol will continue to lead Telemundo following thecompletion of the transaction. McNamara will report to Lack. Fully bilingual,McNamara he served as CEO of New World Entertainment and was president ofUniversal TV Syndication and International Sales. Sokol was formerly with SonyPictures and Savoy Pictures.

As part of the deal, NBCwill also take over Telemundo's ten US full-power UHF stations as well asthe leading full-power television station and related production facilities inPuerto Rico. They join an NBC corporate portfolio that already includes the NBCTelevision Network and 13 television stations, the CNBC financial news cablenetwork, the MSNBC cable network in runs in partnership with Microsoft, plusequity interests in Arts & Entertainment, the History Channel, and RainbowMedia, the holding company for Bravo, AMC and the Independent Film Channel.

While McNamara indicatedthat Telemundo intends to rely on its heavy rotation of telenovelas, somechanges will occur in its programming mix among them the addition of soapoperas provided by Mexico's Argos, an independenttelevision and movie producer that previously had an exclusive agreement withMexican broadcaster TV Azteca.

* Ricardo Salinas,Mexico's powerful businessman who has long controlled TV Azteca, is to bereplaced as CEO of the number two Mexican broadcasting network by 35-year-oldPedro Padilla. Salinas will stay on as chairman, it was announced yesterday.