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 MUMBAI:
NBC Universal and NDTV Ltd today announced a Memorandum of
Agreement (MoA) whereby NBC Universal would acquire an effective
26 per cent share in NDTV Networks, the holding company for
NDTV's entertainment and lifestyle channels, digital media
and other interests, including media products and services.
Channels
operated by NDTV Networks include NDTV Imagine, the Hindi
general entertainment channel, launched yesterday, and the
recently unveiled lifestyle channel NDTV Good Times.
The
agreement, valued at $ 150 million (Rs 6 billion), also includes
an option for NBC Universal to increase its stake to 50 per
cent in the JV through which NBCU is investing. The option
would be exercisable at fair market value in two years' time.
The
announcement was made today in London by Jeff Zucker, President
and CEO, NBC Universal and Dr Prannoy Roy, Chairman and joint
founder of NDTV Ltd.
NDTV
Networks had last year raised $120 million through private
equity placement that reportedly included Lehman Brothers,
Goldman Sachs, Credit Suisse and Velocity Interactive Group
(earlier called ComVentures) for a nearly 24 per cent stake.
Of the $ 120 million already raised, NDTV Imagine is expected
to consume $106 million.
The proposed transaction is expected to be finalized once
shareholder and regulatory approvals are in place.
This
is the fourth deal of a major US media conglomerate taking
a stake in a TV network in India recently. Viacom has a 50:50
JV with Network 18 in Viacom 18, Disney has picked up a 14.85
per cent stake in UTV and Turner International last month
announced an equal joint venture with Miditech promoters,
the Alva Brothers, to roll out entertainment channels in Hindi
and other Indian languages.
Zucker
said: "This will be a significant investment for NBC
Universal in an important emerging market and further illustrates
our commitment to expand our company internationally, particularly
in high-growth areas. The Indian TV market is expected to
grow at 16 per cent annually, which provides huge opportunities
now and into the future."
Dr Roy stated, "We are delighted to have NBC as our partner.
This agreement is a significant step for us. Today, two pioneers
in the television history of the world's two largest democracies
have come together to cater to a dynamic and demanding set
of viewers."
Peter Smith, president, NBC Universal International, commented:
"This investment will represent a further major step
in our international expansion strategy."
Tejpreet
Singh Chopra, president & CEO, GE India, commented, "With
today's announcement, GE is moving to further strengthen its
presence in and commitment to India. The media industry in
the country offers tremendous opportunity for growth."
Once consummated, the investment by NBC Universal will represent
a further milestone in its strategic commitment, announced
by Zucker in April 2007, to more than double the size of its
international operations in the next three years.
Shares
of NDTV rose on the news, later closing 0.4 per cent lower
at Rs 392.35 on the Bombay Stock Exchange, compared with the
main index's 4.97 per cent decline to 16, 729.94.
NDTV Networks Plc is a UK-registered company that owns five
subsidiaries of NDTV: NDTV Imagine Limited, NDTV Lifestyle
Limited, NDTV Convergence Limited and NDTV Labs Limited and
50 per cent in NGEN Media Services Private Limited.
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