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European media mergers and acquisitions nearly doubled in 2010 – and will bounce even farther back in 2011, thanks to regulatory relaxation, private equity sell-offs and an embrace of digital, PricewaterhouseCoopers forecasts.
“Private equity firms, who have been significant acquirers of media assets over the last five years, appear to be readying assets for sale,” writes PwC’s media and entertainment partner Nick George. “Further acquisitions should also be driven by technology change, in particular the embrace of digital by European media companies.
“Digital is impacting virtually every sub-sector of media, with even the most ‘traditional’ of segments such as books and magazines now seeing strong digital impacts from e-readers and tablet devices. Revenue growth is increasingly digitally driven, and having weathered probably the worst of the downturn, media companies will look to digital M&A to drive the top-line.”
Though George says tablet “impacts” are strong, we suspect they have so far been low-key, at least compared to what they will become this year and later, when other tablet brands and increased iPad adoption filter through to real revenue – many media companies have been in experiment mode with iPad.
Says PwC’s Andy Morgan: “There is a clear return of confidence in the M&A market which, combined with greater stability and liquidity in the credit markets, sets a good platform for an upturn in activity in 2011.”
After a 2009 full of brutal restructuring and muted deals activity, 2010 saw 100 European media deals; their value up 90 percent from the previous year, to €12 billion – topped by Libery Global buying Spanish pay-TV operator Prisa and EQT buying Springer Business Media.