News Corp buys into Saudi group

Rupert Murdoch’s News Corp has reached an agreement to buy a 9% stake in Rotana Media Group, the entertainment giant owned by the Saudi royal family.

News Corp will acquire newly issued shares in Rotana for US$70m. The company has an option to increase its stake to around 18% in the 18 months following completion.

News Corp was rumoured to be buying a stake in the firm as far back as last September. The company is owned by Saudi billionaire Prince Alwaleed bin Talal.

Rotana hosts Fox channels in Saudi Arabia via its television network (Rotana TV) and owns rights to more than 2,000 Arabic movies. It also owns a film production company, a magazine (Rotana Magazine) and a record label (Rotana Records). In addition, it has a fledgling digital music and video business.

James Murdoch, chairman and CEO of News Corp, Europe and Asia, said: “A stake in Rotana expands our presence in a region with a young and growing population, where GDP growth is set to outstrip that of more developed economies in the years ahead. Rotana is a leading player in the Middle East and we look forward to working together.”

News Corp agreed to sell its Bulgarian terrestrial TV business, bTV, last week for US$400m in cash to leading regional broadcaster CME.