Media sector deal values are predicted to reach €20 billion in 2004 and the number of transactions will exceed 100, according to the latest Media Insights report from PwC Corporate Finance.
Transaction values increased sharply in 2003, from €11.5 billion in 2002 to €16.8 billion. Deal volumes saw a softer recovery growing from 78 to 85. Media mega-deals also experienced a comeback in the second half of 2003. Of the 10 transactions valued at over €500 million during 2003, six were completed in the last six months. The second half also accounted for the only three €1 billion-plus mega deals.
Publishing was the most active area by value of the European media market in 2003 with 38 transactions totalling €10 billion. This compares with 10 deals totalling €0.4 billion in marketing services which is already well consolidated in Europe.
Private equity groups were involved in 23 transaction in 2003 which represents over 25% of all European media M&A deals. In terms of deal size this number is 57% of total deal value.
Predictions for 2004 include:
TV production and radio broadcasting alongside the broad spectrum of publishing activities are likely to remain the most buoyant areas for M&A activity; marketing services companies are likely to see a bounce back in M&A activity as multinationals seek to develop their geographic and product networks.