Viacom Inc. has won a battle over a broadcast network that reportedly had more than 20 suitors interested in purchasing it, including Discovery Communications and Scripps Networks.
Reuters reports that Viacom announced today that "it would buy British TV broadcaster Channel 5 from media baron Richard Desmond for $760 million (450 million pounds) as a keystone to develop its worldwide presence."
Channel 5, which launched in 1997 as the U.K.'s fifth public-service broadcaster, is a free, over-the-air network that airs hit shows such as "Big Brother" and "CSI" and has more than 43 million viewers monthly, the report notes. "Viacom, which owns a stable of cable channels such as MTV, Nickelodeon, Comedy Central and movie studio Paramount Pictures, said the deal would also allow the company to tap new ideas," the piece adds.
The deal is the largest so far for Viacom since its split with CBS in 2006. Commenting on the deal, Viacom CEO Philippe Dauman said, "It was a unique opportunity," adding: "This gives us another significant base of programming."
Dauman noted that Great Britain is a leading center of creativity for TV and film, the report adds.
"Dauman cited Channel 5's 'Milkshake!,' a block of children's programming that will complement Viacom's Nickelodeon kids network," Reuters notes.
The article reports that Desmond is selling Channel 5 for more than four times what he paid for it in 2010. He "is credited with turning the channel around by cutting costs aggressively and focusing on cross-platform promotion and reality TV shows," the report adds.
Viacom expects the acquisition, which is subject to regulatory approval, to boost earnings as soon as the deal closes, the piece notes.
"The media conglomerate, which is controlled by billionaire Sumner Redstone, generated about 16 percent of its 2013 revenue from Europe, noted Vijay Jayant, an analyst with ISI Media," Reuters reports.
Said Jayant: "This acquisition in one of the strongest markets in Europe will help diversify the company's exposure."