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All-cash transaction to help Spanish incumbent pay off some debt.
Telefonica this week agreed to sell its Argentine TV business Telefe to Viacom for $345 million (€322.6 million) in cash.
Telefe reaches 95% of households in Argentina, and has an audience share of approximately 33%. The TV network produces more than 3,000 hours of Spanish-language content per year, including seven of the top 10 most-watched programmes currently on air.
Rumours began circulating in June that Telefonica planned to offload Telefe, with sources claiming that the Spanish incumbent had compiled sales materials and made contact with potential suitors.
News of the sale of Telefe to Viacom was initially reported by Bloomberg earlier this month.
"This transaction is consistent with Telefonica’s asset portfolio management strategy – focused in value creation and strategic positioning – and it allows the company to concentrate even more on its principal activities in Argentina: the development of the telecommunications sector and the most advanced technologies in connectivity to drive the digital society of the future," said Antonio Marti, director of business transformation and planning at Telefonica’s chief commercial digital office, in a statement on Tuesday.
Indeed, the deal will also help Telefonica pay down some of its hefty net debt, which stood at €49.99 billion at the end of September.
Viacom will finance the deal with cash on hand. The transaction is subject to regulatory approval. The companies did not reveal when they expect the deal to close.
"Telefe is an outstanding broadcast and production business, and this acquisition will accelerate our growth strategy in Argentina, one of the most advanced and valuable media markets in Latin America," said Bob Bakish, acting president and CEO of Viacom.
"Working together with Telefe’s highly successful team, we can strengthen Telefe’s market-leading status in Argentina and expand its presence around the world using Viacom’s extensive global network, potentially reaching hundreds of millions of Spanish speakers across Latin and North America, as well as in other markets," he said.
