Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Europe’s largest media company Bertelsmann is selling its Dutch TV operations for €1.1bn in a partial retreat from the European television market after antitrust watchdogs thwarted its attempts to create “national media champions” to rival global streaming services.
RTL Group, which is majority-owned by Bertelsmann, announced on Friday that Belgian media group DPG Media was acquiring its Dutch arm RTL Nederland in an all-cash deal. The division has €700mn in annual revenue and accounts for a tenth of RTL’s overall business.
DPG already owns the leading TV channel in Flemish-speaking Flanders, as well as French-language RTL Belgium, which it bought from RTL Group last year.
The sale of RTL Nederland comes after previous plans to merge the channel with domestic rival Talpa to create the leading TV network in the country was blocked by the Dutch competition authority earlier this year.
Thomas Rabe, chief executive of Bertelsmann and RTL Group, told the Financial Times that the sale to DPG was the “second-best option but still a very good one”, adding that he would have preferred the blocked deal with Talpa.
“We did fight for the merger a long time,” he said, adding competition authorities had an “outdated view” because they focused on market shares along national boundaries in Europe rather than taking a cross-country view. In-country consolidation was necessary as “size is required to be able to keep up with the competition with rivals from the United States and increasingly China, in particular with regard to streaming”, he said.
The sale of RTL Nederland values the Dutch operations roughly at a 50 per cent premium compared with RTL Group, according to data from S&P Global Market Intelligence.
RTL said it would generate a capital gain of €800mn for RTL Group that would be largely tax free. “We are getting a really good price,” said Rabe, adding that the bulk of the profit will be paid out to RTL’s shareholders through a higher dividend that could increase by €4 per share for 2024. In 2022, the company paid out €4 per share.
Bertelsmann, which holds a 76 per cent stake in RTL Group, was planning to reinvest its share in the profits into its business activities, he said.
Rabe indicated that the transaction could be a template for further divestments in other countries. “The same arguments that apply to the Netherlands also apply to other markets,” he said.
In 2022, Bertelsmann walked back from a planned merger of its French TV channel M6 with Bouygues-owned FT1 after regulators raised far-reaching concerns. But Rabe stressed that the German group was not currently in concrete talks about divestments in France or other countries.
The sale of RTL Nederland requires regulatory approval, but Rabe said he was confident that it would be granted by next summer as DPG Media — a company with €1.8bn in annual sales — currently has no TV operations in the Netherlands. “I cannot see any problem here,” said Rabe.
Christian Van Thillo, executive chair of DPG Media, said in a statement that the transaction would create “necessary scale to invest in the digital transformation of television”.
Read the full article here
