Discovery Communications today announced the completion of its acquisition of a controlling interest in sports entertainment group Eurosport International. Discovery increased its interest in Eurosport to 51 percent from 20 percent as part of a larger strategic partnership with TF1 Group that began in December 2012.
Discovery was one of the first US media companies to launch channels in Europe in 1989 and has invested steadily and significantly in its international business for 25 years. With the addition of Eurosport’s six pay-TV brands, Eurosport, Eurosport HD, Eurosport 2, Eurosport 2 HD, Eurosport Asia-Pacific and Eurosportnews, Discovery Communications now operates more than 210 worldwide TV networks reaching 2.7 billion cumulative subscribers.
“By combining Eurosport’s popular sports programming with Discovery’s global brands and local expertise, we will continue to capitalize on the international growth of pay-TV and create long-term value for our shareholders,” said in a statement David Zaslav, President and CEO of Discovery Communications.
Discovery intends to strengthen and expand Eurosport’s sports programming and services to nourish and maximize Eurosport’s audience and reach. As part of that effort, Discovery will be working with Eurosport management and employees on a long-term business plan that fully optimizes Eurosport’s channels as part of Discovery’s suite of global networks.
The closing price for Eurosport International was based on an average enterprise valuation for the Eurosport Group of €902 million (approximately $1.2 billion), partly corresponding to the initial valuation and partly to a higher valuation linked to the control of the company. From this group valuation, the value of Eurosport France (€85 million, approximately $115 million) has been deducted. TF1 expects to retain its 80 percdent interest in Eurosport France until at least January 1, 2015. Also, today’s closing does not impact the other two elements of the original deal – the 20 percent interest Discovery acquired in TV Breizh, Histoire, Ushuaïa TV and Stylía channels, and a production alliance with TF1 Group. TF1 will retain the ability to exercise a put option over the remaining 49 percent in Eurosport International, which would potentially increase Discovery’s ownership to 100%.