Media M&A activity hits six year peak

The deal value of M&A activity in the European media industry rose to €43bn in 2006, a 75% increase, with the Continent alone accounting for €37bn, a figure not seen since the media boom of 2000.

These statistics are the latest findings of PriceWaterhouseCoopers Media Insights report, which highlights the impact of seven €1bn-plus mega deals such as the €7.7bn acquisition of Dutch publishing group VNU by Valcon, sold in May by a private equity consortium of AlpInvest Partners, Blackstone, Carlyle Group, Hellman & Friedman LLC, KKR and Thomas H. Lee Partners. Other headline deals include KKR’s acquisition of Pages-Jaunes Groupe in France for €3.3bn and Premira and KKR’s acquisition of 50.5% of Prosieben Sat1 for €3bn.

Private equity saw its busiest year ever in the media sector, with 35 deals adding up to €19bn, a 13% increase by volume and a 111% increase by value on 2005.

M&A activity in the UK was less spectacular than across the English Channel. The country experienced just a 3% increase in volume in 2006, with deal value declining 25% to €6.2bn.

PwC predicts the UK will bounce back in 2007, aided by the expected uptick in the UK advertising. The firm also reckons mainstream media groups will grow their on-line capabilities to compensate for the decline of print and publishing media, and private equity firms will continue to show an appetite for Europe’s media assets.