CLT-Ufa/Pearson TV Merger Changes European Map

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Cannes, France-Germany's Bertelsmann A.G. may be the biggest beneficiary of the planned merger of Luxembourg-based TV company CLT-Ufa and the television unit of Britain's Pearson plc, according to European media experts.

"They accomplished that by becoming the biggest shareholder" in what would be Europe's biggest TV and radio company, an investment banker familiar with the merger agreement said.

Bertelsmann and its partner, German publisher Group WAZ, will own 37 percent of the new company. It effectively extends its control over CLT-Ufa's TV and radio operations, and will have a greater influence at British broadcaster Channel 5, of which CLT-Ufa owns 28 percent.

The merged company would have annual revenue of about 8 billion euros ($8 billion), and would likely be named Groupe RTL, after CLT-Ufa's European broadcast-TV stations.

Another 30 percent of Group RTL would be held by Groupement Bruzelles Lambert, an investment vehicle of Belgian banker Albert Frére, who controls CLT-Ufa partner Audiofina S.A. Pearson, with 22 percent, would own the smallest stake, and 11 percent would trade on the London Stock Exchange.

CLT-Ufa executive board member Ewald Walgenbach said the merger "will provide genuine program-production power and increase our market power dramatically."

KirchGroup, Bertelsmann's direct competitor in Germany, seems to see no need to react immediately. Jan Mojto, CEO of Epsilon, a new joint venture between Kirch and Italy's Mediaset SpA, said Groupe RTL would not pose a threat to his company.

"While CLT-Ufa seems to concentrate in getting control over channels across Europe, our core business is program production," Mojto said.

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