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
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
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.
Vice President, Corporate Communications
Mr Matti Packalén, CEO Aamulehti Corporation, tel. +358 9 507 8715
Mr Eero Pilkama, CEO MTV Corporation, tel. +358 9 1500 400
Helsinki Stock Exchange
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