Fueled by two major deals involving Liberty Global and broadcaster Nexstar Broadcasting Group, media M&A deals were up 69% in the first quarter according to research firm Mergermarket, even as the overall deal climate contracted.
Liberty Global and Vodafone’s $6.97 billion joint venture to combine their Dutch cable assets and Nexstar Broadcasting’s pending $4.6 billion purchase of Media General, helped drive the media segment for the quarter, which finished at 117 deals worth $20.4 billion, a 69% increase from the $12.1 billion last year. The media segment was the only sub-sector that showed gains in the period, according to Mergermarket. In total, about 583 telecom, media and technology deals were made in Q1 worth $85 billion, down 45.5% from the 745 transactions valued at $156 billion last year.
While deal volumes and values across the tech and telecom sectors were down for the year, Mergermarket expects activity to pick up as the growing importance of the Internet of Things, big data, could computing and mobile platforms could drive deals. In the media sector, continued consolidation and the need for scale should also keep transactions high.
“Media in the first half of 2016 could see an increasing trend toward consolidation as the need for cost synergies grows within the sub-sector,” Merger market said in its report.