Viacom has acquired UK terrestrial broadcaster Channel 5 for £450 million (€548 million), in a deal the US entertainment giant said will accelerate its strategy in “one of the world’s most important and valuable media markets.”
Confirming the deal today, Viacom said that free-to-air Channel 5 will complement Viacom’s existing pay TV networks and “enhance distribution opportunities for Viacom content.”
It added that the deal builds on Viacom’s long track record of investment in the UK, where the company launched MTV in 1987, Nickelodeon in 1993 and Comedy Central in 1995 and currently has 20 branded TV networks onair, including BET, VIVA and VH1.
“This deal will dramatically increase Viacom’s investment in content produced in the UK, which has a widely admired public service broadcasting culture and a globally influential production sector,” said Viacom President and CEO Philippe Dauman.
“We look forward to partnering with local producers to introduce more UK-created content to global audiences, and will continue to explore opportunities in the UK, both in the free-to-air and pay television markets.”
Dauman said the deal will help Channel 5 “develop even more compelling programming and provide content to consumers in exciting new ways.”
Under the terms of the agreement, Viacom will acquire all brands and assets of Channel 5 – including its main terrestrial channel, its additional DTT networks 5* and 5USA, pre-school children’s programming brand Milkshake! and VOD service Demand 5.
Viacom said that the £450 million deal price will be financed by its existing cash balances and is subject to customary regulatory approvals.
The buyout marks a substantial return for media mogul Richard Desmond whose holding company Northern & Shell bought Channel 5 for €125 million in 2010.
The news comes after Discovery was said to have dropped out of the running for Channel 5 in April. The firm was reported to have been previously working on a joint bid with BSkyB.
According to reports, Northern & Shell boss Richard Desmond had initially sought more than £700 million for Channel 5.