AMC Networks Inc. said it will pay about $1.04 billion for a broadband provider in an effort to gain greater control over global distribution of the company’s programming. Reuters reports that AMC will buy Chellomedia, the international content division of John Malone’s Liberty Global.
Chellomedia reportedly is one of the largest international channel groups, providing its network channels to more than 390 million households in 138 countries.
"Liberty Global said the deal would help it simplify its business and allow it to focus on its core market," the story reports. "Malone, known as the ‘King of Cable,’ jumped back into the U.S. cable market earlier this year by buying a 28 percent stake in Charter Communications. Until then, he had been on a decade-long acquisition spree in Europe."
Liberty Global is the largest cable operator in Europe, the report notes, adding that the company "was recently outmaneuvered by Vodafone in competing bids for German operator Kabel Deutschland."
In a research note, J.P. Morgan Cazenove analyst Carl Murdock-Smith said: "In our view, the (Chellomedia) disposal improves Liberty’s liquidity to potentially help fund acquisitions."
AMC Networks is home to hit shows including "Mad Men," "Breaking Bad" and "The Walking Dead." The businesses the company is purchasing include Chello Central Europe, Chello Latin America and Chello Zone, the report notes.
"The network will also acquire Chellomedia’s stakes in joint ventures with CBS International, A+E Networks, Zon Optimus and other partners," the report adds. "AMC Networks has been spending money to develop content to and expand programming on AMC and its other channels, which include Sundance and IFC."
The story notes: "Analysts have predicted a wave of consolidation in the U.S. cable industry, which faces rising programming costs as well as technology threats from upstarts such as Netflix Inc."