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    RRTL   LU0061462528

RTL GROUP S.A.

(RRTL)
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RTL S A : Group and Talpa Network to create a strong Dutch cross-media group to compete with global tech platforms

06/22/2021 | 12:35pm EDT
  • Proposed merger of RTL Nederland and Talpa Network assets will create a strong Dutch cross-media group across TV, streaming, radio, print and digital, also to the benefit of audiences and the Dutch creative industry
  • Newly formed group will have the scale, resources and creativity to compete with global tech platforms in the Netherlands
  • Strong commitment from both shareholders for long-term development, investment in high-quality Dutch content, diversity and pluralism of opinion
  • Clear ambition to further expand Videoland, the leading Dutch streaming service with one million paying subscribers, and to offer the most innovative and transparent advertising opportunities
  • Value creation for both shareholders through significant synergies, estimated between €100 million and €120 million per year
  • Transaction terms: Talpa Network will contribute its TV, radio, print, digital, e-commerce and other assets to receive a 30 per cent stake in the enlarged RTL Nederland - RTL Group to remain controlling shareholder of RTL Nederland, owning 70 per cent of the combined group
  • Sven Sauvé, CEO of RTL Nederland, will lead the combined group after closing the transaction; Pim Schmitz, CEO of Talpa Network, to join the new Supervisory Board of RTL Nederland which will be chaired by Elmar Heggen, COO and Deputy CEO of RTL Group

Luxembourg/Cologne/Hilversum, 22 June 2021 - RTL Group and Talpa Network today announced that they have signed agreements to merge their broadcasting and affiliated media businesses in the Netherlands and create a strong Dutch cross-media group. In the growing competition with global tech platforms, the merger will allow the combined group to step up investments in local content, technology and data, offering Dutch audiences the broadest spectrum of high-quality entertainment and reliable information programmes. Both the Dutch creative industry and advertising market will benefit from the ambitious long-term strategy pursued by RTL Group and Talpa Network.

The transaction, which has been approved by the Board of Directors of RTL Group and Talpa Holding, is subject to approval from the competition authorities and is expected to close in the first half of 2022. The advisory process with the respective works councils will start in due course.

According to the agreements, Talpa Network will contribute its TV, radio, print, digital, e-commerce and other assets to RTL Nederland and will receive a 30 per cent stake in the enlarged RTL Nederland in return. RTL Group will hold the remaining 70 per cent in the combined group and will continue to fully consolidate RTL Nederland in its accounts. Sven Sauvé will continue in his current role as CEO of RTL Nederland, leading the combined group after closing the transaction. Pim Schmitz, CEO of Talpa Network, will represent Talpa Network by joining the new Supervisory Board of RTL Nederland which will be chaired by Elmar Heggen, COO and Deputy CEO of RTL Group.

In addition, Talpa Network's content units (Talpa Concepts, Talpa Entertainment Producties) - which are not part of the deal - and RTL Nederland will enter into a content agreement for newly developed formats for linear TV channels and for the streaming service Videoland.

The combined group would have 2020 revenue of €909 million1 and operating profit (EBITA) of €84 million1. The annual content spend of the combined group amounts to more than €400 million. The potential synergies of the merger (EBITA run-rate impact) are estimated between €100 million and €120 million per year, to be fully realised in 2025.

Thomas Rabe, CEO of RTL Group, says: 'Following the proposed merger of Groupe TF1 and Groupe M6 in France, the combination of RTL Nederland and Talpa Network is the second major step to scale up our broadcasting businesses across our European footprint. The new cross-media group will have the size, resources and creativity to compete with global tech platforms in the Netherlands when it comes to investing in premium content, offering the most advanced addressable advertising opportunities, and expanding Videoland, the leading national streaming service for Dutch viewers.'

Elmar Heggen, COO and Deputy CEO of RTL Group, says: 'This merger demonstrates that a combination of national commercial broadcasters in a rapidly changing environment forms a strong and sustainable basis for future growth in the interest of our shareholders. John de Mol has an outstanding entrepreneurial and creative track record. Our long-term partnership and collaboration in the area of content development will be an important success factor for our linear TV channels and streaming offers.'

John de Mol, owner of Talpa Network, says: 'I started Talpa Network to build a strong Dutch media company able to compete with the growing global platforms in order to preserve local content. This next step will allow us to do just that - and I am pleased that the deal creates a strong Dutch company that not only guarantees Dutch quality content, but is also able to take on the American and Chinese tech players. On top of that, it allows me to fully focus once again on what I like best: the creation and development of new innovative content.'

Pim Schmitz, CEO of Talpa Network, adds: 'We have been able to build a strong, local, creative media company, despite challenging circumstances. There is no better time to combine forces with RTL.'

Sven Sauvé, CEO of RTL Nederland, says: 'Over the last 31 years, we have built a successful company with solid financial foundations. The current changes in the media industry demonstrate the importance of strong national media players that understand the art of local storytelling and invest substantially in digital innovation, social and cultural relevance, and independent journalism. This exciting new phase gives us the possibility to ramp up investments in content, technology and data to create a competitive and distinguished alternative to global tech players. This will bring value not only for our viewers, but also for advertisers and the creative industry as a whole. We look forward to working together with John de Mol and Talpa to steer this new group towards a bright future.'

J.P. Morgan is acting as exclusive financial advisor to RTL Group and PJT Partners as exclusive financial advisor to Talpa Network. NautaDutilh is acting as legal advisor to RTL Group and Freshfields Bruckhaus Deringers LLP as legal advisor to Talpa Network. EY is acting as transaction advisor for RTL Group and Deloitte is acting as transaction advisor for Talpa Network.

1 Adjusted and pro forma unaudited

Disclaimer

RTL Group SA published this content on 22 June 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 22 June 2021 16:34:02 UTC.


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Sales 2021 6 463 M 7 573 M 7 573 M
Net income 2021 635 M 744 M 744 M
Net cash 2021 409 M 479 M 479 M
P/E ratio 2021 12,4x
Yield 2021 8,37%
Capitalization 7 882 M 9 230 M 9 237 M
EV / Sales 2021 1,16x
EV / Sales 2022 1,10x
Nbr of Employees 15 960
Free-Float 23,7%
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Mean consensus OUTPERFORM
Number of Analysts 9
Last Close Price 51,35 €
Average target price 55,44 €
Spread / Average Target 7,97%
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Managers and Directors
Thomas Hermann Rabe Chief Executive Officer & Executive Director
Bj÷rn Bauer Chief Financial Officer
Martin Taylor Chairman
Vincent Jean Hubert Pascaud Senior Vice President-Group IT & IT Governance
Elmar Heggen COO, Deputy CEO & Executive Director
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