MTG sells Nordic TV business

Sweden’s Modern Times Group (MTG) has agreed to sell its Nordic TV business to Danish telecommunications firm TDC Group in a deal that values ​​it at SEK19.6bn (US$2.5bn).

The company said the deal would create Europe’s first fully convergent media and communications provider.

MTG has been busy selling off a number of its broadcast assets over the past few years and investing in new digital ventures, but it will now offload its MTG Entertainment and MTG Studios units – together known as MTG Nordics – in whole to TDC, the largest telecoms company in Denmark.

MTG Nordics includes broadcasting, streaming and distribution operations in Sweden, Denmark, Norway and Finland, spanning free and pay TV. It houses the Viasat satellite TV platform, Viaplay digital streaming services, Nice Entertainment production operation and distributor DRG.

Nice is one of Europe’s biggest producers, with a portfolio that includes Monster, One Big Happy Family, Playroom, Rakett and Novemberfilm in Norway, as well as Strix in Scandinavia and the Netherlands, Paprika Latino in Eastern Europe and Redaktörerna in Sweden. It includes 28 companies in 16 countries and was acquired by MTG in a deal worth €84.4m (US$114.2m) five years ago.

MTG Nordics employs 1,800 people in total.

The deal will see TDC pay SEK3.3bn in cash and issue 309 million new shares to existing MTG stakeholders, implying a value of SEK19.6bn for the combined business.

The combination of TDC and MTG Nordics will create a player with preliminary combined net sales of approximately DKK30.6bn (US$5.11bn) and EBITDA of DKK9.6bn for 2017.

The remaining MTG business will focus on the expansion of its global digital entertainment operations, spanning areas such as eSports.

TDC CEO Pernille Erenbjerg will become CEO of the combined company with MTG executive VP Anders Jensen becoming deputy CEO.

“MTG has a long history of being at the forefront of change, and this combination is further evidence of our commitment to shaping the future of entertainment and creating value for our shareholders,” said MTG chairman David Chance.

“Convergence is a reality and the development of ever-improving consumer products requires ever closer and deeper partnerships between content creators and network operators, which is why this combination will provide the brightest future for our Nordic businesses.”

MTG President and CEO Jørgen Madsen Lindemann added: “Together, we will have an enhanced platform for the development of the Nordic Entertainment and MTG Studios businesses, which have performed so strongly over the past year and will be led into this exciting new combination by MTG’s Anders Jensen.

“MTG will then focus entirely on building out and adding to our global eSports, online gaming and digital video content operations. The regulatory review of the combination is expected to conclude in the second half of the year, so it is business as usual for now.”