Viacom to buy UK’s C5

US media giant Viacom is to acquire UK free-to-air broadcaster Channel 5 (C5) in a deal worth £450m (US$759m).

The pact comes after C5 parent Northern & Shell (N&S) appointed Barclays Banks to scout out bids in the region of £700m for the channel, which it bought from RTL Group for £103.5m in 2010.

Viacom becomes the first US-based company to own a UK terrestrial broadcaster. It already operates MTV, Comedy Central and Nickelodeon in the UK, commissioning some original local content.

C5 has revamped its schedule since the N&S buy-out, acquiring rights to Endemol reality format Big Brother after Channel 4 ended its association with the show. It is the home of US dramas such as the CSI franchise, Under the Dome and Mark Burnett’s The Bible.

“The acquisition of Channel 5 accelerates Viacom’s strategy in the UK, one of the world’s most important and valuable media markets,” said Viacom President and CEO Philippe Dauman.

“Viacom’s global resources, technology and expertise will help Channel 5 develop even more compelling programming and provide content to consumers in exciting new ways. In addition, we will introduce our popular content to new UK audiences and create a comprehensive offering for our commercial partners on-air and on-line.

“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. 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.”

Under the agreement, Viacom will acquire all C5 brands and assets including the main terrestrial network plus its spin-offs 5*, 5USA, kids’ strand Milkshake! and VoD service Demand 5.

Some analysts have said the channel is overpriced, but even at £450m, N&S boss Richard Desmond will still have quadrupled his initial investment.

C5 reported a profit of over £20m in the first six months of 2013, versus a loss of £16.1m during the same period in 2012. Reports suggest it will make a £70m profit this year.

A number of international broadcasters were thought to have been interested including Discovery Communications, which had reportedly been considering a joint bid with UK satcaster BSkyB.

C21 understands Discovery baulked at the asking price having made an offer of £350m and dropped out of the running.