As it continues to investigate the possibility of a merger with former corporate sister CBS, Viacom said Tuesday that it has agreed to purchase Argentine over-the-air broadcaster Television Federal S.A. (Telefe) from Spanish-language broadcast company Telefonica S.A. for $345 million in cash.
According to Viacom, Telefe reaches 95% of all households in Argentina, a country of 43 million, and has attracted about 33% share of viewership year-to-date in 2016. The network produces more than 3,000 hours of Spanish-language video content each year, including seven of the top 10 programs currently airing locally, and has a library of 33,000 hours of local content. By combining Telefe with Viacom’s popular pay TV networks, which include MTV, Nickelodeon, Comedy Central and Paramount Channel, Viacom said the deal further strengthens VIMN’s position in Argentina and Latin America.
Reuters first reported that Viacom was looking at the Argentine broadcaster earlier this month. Viacom also is in the middle of looking into a possible merger with CBS, and hired advisers to work with an independent committee of its board to investigate the matter. CBS also hired advisers to evaluate a possible deal last month.
“Telefe is an outstanding broadcast and production business, and this acquisition will accelerate our growth strategy in Argentina, one of the most advanced and valuable media markets in Latin America,” Viacom acting CEO Bob Bakish said in a statement. “Viacom has an unrivalled track record of combining free and pay TV networks to deliver strong growth in high-value or high-growth markets, including in the UK and India. Working together with Telefe’s highly successful team, we can strengthen Telefe’s market-leading status in Argentina and expand its presence around the world using Viacom’s extensive global network, potentially reaching hundreds of millions of Spanish speakers across Latin and North America, as well as in other markets.”
Under the terms of the agreement, Viacom will acquire all of Telefe’s brands and assets, including:
- Telefe in Buenos Aires Capital and Gran Buenos Aires, a free-to-air network initially launched as Tele Once in 1961. The network’s programming includes Educando a Nina, Loco x Vos, Susana Giménez, Pesadilla en la Cocina and Telefe Noticias.
- Eight wholly-owned channels in the interior of the country, including Canal Cinco in Rosario, Canal Siete in Neuquén, Teleocho in Córdoba, Canal Ocho in Mar del Plata, Canal Ocho in Tucumán, Canal Nueve in Bahía Blanca, Canal Once in Salta and Canal Trece in Santa Fe
- Telefe Internacional, a pay TV channel seen throughout the Americas and distributed globally to 10 million subscribers across 17 countries
- A multiplatform presence through applications such as Mi Telefe (My Telefe) and Telefe Noticias (Telefe News), a multi-channel network called UPlay founded by Telefe and an e-commerce partnership with Mercado Libre
- Twelve production studios which have a combined total of 12,000 m2 of production space
- A library of over 33,000 hours of content currently distributed in more than 100 countries in 35 languages
Telefe will fall under the direction of VIMN Americas president Pierluigi Gazzolo, and builds on Viacom’s long history in the Argentine market. Viacom first launched MTV in the country in 1993 and its Argentine portfolio include 12 pay TV networks, including Nickelodeon, Nick Jr., Comedy Central, Paramount Channel, VH1, and others; a suite of authenticated TV Everywhere mobile apps; multiple on-the-ground events and experiences; and an extensive consumer products catalogue. VIMN has maintained a local office in Buenos Aires since 1995.
UBS Investment Bank served as financial advisor to Viacom Inc., while M.& M. Bomchil and Shearman & Sterling served as its legal advisors. Citigroup served as financial advisor to Telefónica, while DLA Piper and A & F Allende Ferrante served as its legal advisors.