PPF Group is now in the final stages of acquiring Central European Media Enterprises (CME) in a deal worth some $2.1 billion.
Indeed, the last major obstacle appears to be an investigation by the European Commission, with a ruling expected by October 6.
However, this is no ordinary transaction and has attracted its fair share of controversy since it was first announced in October 2019. Earlier this year, before the global pandemic struck and it was business as usual for the broadcast industry, the US Republican senator Marco Rubio called for a review of the sale by the Committee on Foreign Investments in the United States (CFIUS) on the grounds of national security. As a subsidiary of a US company (AT&T), any ownership change at CME was in his view worthy of such an investigation, especially given PPF Group and its owner Petr Kellner’s alleged close links to China.
Perhaps not surprisingly, PPF Group strongly refuted these allegations but we have since heard little more about the matter. In the meantime, CME has reported disappointing Q2 results, with net revenues and net income being 26.2% and 29.4% lower respectively than in the corresponding period in 2019.
Although CME has broadcast interests in five Central and East European markets, the main concerns about its upcoming sale appear to be in the Czech Republic. Some were voiced earlier this week by Petr Dvorak, the head of the public broadcaster Ceska Televize (CT), who said that it will be asking the European Commission to ensure that it is guaranteed equal access to sports broadcast rights in any ruling in makes on the transaction. PPF Group, itself a Czech company, already owns the incumbent telco O2 and by buying CME will also gain control of TV Nova, the country’s leading commercial station.
While CME is no longer the leading player it once was in the region’s TV industry, it remains an important one and PPF Group stands to gain much from its acquisition.
For more information about Chris Dziadul, please visit https://www.chrisdziadul.com
