ALMA MEDIA ACQUIRES 23.4 % OF SWEDENS TV 4 AB
AAMULEHTI CORPORATION STOCK EXCHANGE BULLETIN 1/3 MTV CORPORATION 21 October 1997, at 10:00 am, local time ALMA MEDIA ACQUIRES 23.4 % OF SWEDENS TV 4 AB Aamulehti Corporation and MTV Oy will acquire 23.4 % of Swedens leading commercial TV channel, TV 4 AB, for approx. FIM 550 million. The acquisition, which will have no material impact on the results of the acquiring companies in 1997, makes Alma Media TV 4 ABs largest shareholder. Aamulehti Corporation and MTV Corporation are expected to merge on 1 April 1998, forming a new communications company called Alma Media Corporation. After this acquisition Alma Media Corporation will have a solvency ratio of about 50 %. The Boards of Directors of Aamulehti Corporation and MTV Corporation have decided to acquire altogether 23.4 % of the stock of Swedens leading commercial TV channel, TV 4 AB, from Investor AB and Föreningsbanken Fonder. The shares will also represent 23.4 % of the voting power in TV 4 AB, which will make Alma Media the largest single shareholder in TV 4 AB. The share acquisition will be put into effect as follows. Aamulehti Corporation and MTV Corporations wholly owned subsidiary MTV Oy will together acquire Investor ABs 21.5 % holding in TV 4 AB: Aamulehti Corporation will acquire 16.5 %, and MTV Oy 5.0 %. Furthermore, in a separate transaction Aamulehti Corporation has acquired 1.9 % of the TV 4 AB stock from Föreningsbanken Fonder. The total price of the shares acquired in TV 4 AB will be approximately FIM 550 million. The transaction will have no significant impact on the 1997 results of either acquiring company, although goodwill amortizations are expected to slighly dilute Alma Media´s 1998 result. The deal is still subject to the approval of the supervisory boards of Aamulehti Corporation and MTV Corporation. Following this acquisition Alma Medias solvency ratio will be about 50 %. TV 4 AB will be an associated company of Alma Media Corporation, which is scheduled to start operating on 1 April 1998. TV 4 ABs other principal shareholders are as follows: Industriförvaltnings AB Kinnevik (22.4 %), Tidnings AB Marieberg (16.7 %), and Fidelity (10.4 %). Expansion of core businesses into growing markets Television represents one of Alma Medias core businesses, according to Mr Matti Packalén, President and CEO of Aamulehti Corporation and the future Alma Media Corporation, and this acquisition will enable expansion into new markets. "The Swedish economy is growing at present, which also means an increase in media advertising in general and television advertising in particular. As the leading commercial television channel with a strong position and well-known brand name, TV 4 is the best possible partner for Alma Media in the Swedish market," he states. "The acquisition opens up new opportunities for co-operation between the two leading commercial television channels in their respective countries and for the further development of commercial television," says Mr Eero Pilkama, President and CEO of MTV Corporation. "Co-operation will enable us to accomplish significant quality improvements in several areas of television broadcasting, not only in our existing operations but in particular in future media and digital television during the coming era of new media and digital television. Joint planning will very soon allow both television channels to gain substantial leverage in international programme purchases and improvements in domestic programme production. Co-operation and sharing of experiencein marketing and sales will also allowe a further expansion of national and regional television broadcasting in both countries," Pilkama says. TV 4 AB In terms of audience shares, TV 4 is Swedens leading TV channel, with a share of 28 %. The next most popular channels are the national channels SVT 2 (26 %) and SVT 1 (21 %). TV 4 is also the only national commercial terrestial channel and it reaches 99 % of the Swedish population. Two commercial satellite channels, TV 3 and Kanal 5, also operate in Sweden. TV 3 reaches 56 % of the Swedish population and it has an audience share of 10 %. Kanal 5 technically reaches 54 % of the population and its share is 7 %. The Swedish media market totalled more than SEK 13 billion in size in 1996, 18.7 % of which came from television advertising. This share has risen extremely fast since 1990, when television advertising accounted for only 2 %. In Finland television advertising accounted for 21 % of total media advertising in 1996. The European average is about 30 %. TV 4s net sales in 1996 totalled approximately SEK 1.6 billion and its share of Swedish television advertising exceeded 60 %. It recorded a profit of SEK 15 million in 1996, which was encumbered by one-time costs totalling over SEK 100 million arising from compensation paid to AirTime AB and to a move to new premises. TV 4 AB recorded a consolidated profit of SEK 150 million in 1995, and its profit for the first six months of the current year was SEK 51 million. TV 4s operating licence allows the company to broadcast local and satellite transmissions in addition to its national terrestial operation. AAMULEHTI CORPORATION Ahti Martikainen Vice President, Corporate Communications Further information: Mr Matti Packalén, CEO Aamulehti Corporation, tel. +358 9 507 8715 Mr Eero Pilkama, CEO MTV Corporation, tel. +358 9 1500 400 Distribution: Helsinki Stock Exchange Principal media Aamulehti Corporation and MTV Corporation are expected to merge on 1 April 1998, forming a new communications company called Alma Media Corporation. The new companys core businesses will be newspaper publishing, television and radio broadcasting, and graphic services. Each business will have annual net sales of approximately FIM 1 billion. Alma Medias proforma net sales in 1996 were roughly FIM 2.6 billion and it had about 3,500 employees.
- Date: 21.10.1997, 08:00
- News type: Stock exchange release
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