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Bloomberg
Italian broadcaster Mediaset SpA has bought a stake in Germany’s ProSiebenSat.1 Media SE as it seeks to diversify beyond its home country and fend off growing competition from Netflix Inc.
The 9.6 percent holding is worth about 340 million euros ($380 million), based on ProSieben’s closing price. ProSieben shares gained 4.4 percent in Frankfurt, while Mediaset fell less than 1 percent.
The purchase by Mediaset, controlled by former premier Silvio Berlusconi’s family, builds on the companies’ existing collaboration in the European Media Alliance network and makes the Italian group ProSieben’s second-largest sha-reholder. European broadcasters are trying to fight back against Netflix and Amazon.com Inc., including by gaining scale through acquisitions and str-eaming partnerships. Vivendi SA’s Canal+ agreed to buy pay-TV operator M7 for about 1 billion euros this week to expand into seven European countries.
Mediaset Chief Executive Officer Pier Silvio Berlusconi, the former premier’s son, called the move a “friendly acquisition†to create an “increasingly international outlook,†in a statement. “European media companies like us need to join forces if we are to continue to compete, or even just resist, in terms of our European cultural identity, eventual attacks by the global giants.â€
Mediaset has been tackling weak profitability in a challenging Italian advertising market by striking content and distribution deals with phone company Telecom Italia SpA and Comcast Corp.’s Sky Italian unit. Now it wants to strike a cross-border deal by July that helps the European industry compete with the US tech giants. While the ProSieben investment sets the ball rolling towards a European tie-up,
Mediaset has no plan to acq-uire the rest of the German company, said people familiar with the situation, who asked not to be identified discussing internal matters.
The investment in free-to-air broadcaster ProSieben follows years of setbacks for Mediaset’s efforts to cash in on its pay-TV business, after Vivendi backed out of a deal to buy the unit in 2016, triggering a legal spat between the two companies. The-re has long been industry spec- ulation about a possible tie-up between Mediaset and ProSi-eben and the companies denied a newspaper report that they were in merger talks, in April.