Telenor and Nordic Entertainment Group (NENT) have announced that the European Commission has approved their joint venture, combining Telenor's Canal Digital satellite-pay TV arm with NENT’s Viasat Consumer pay-TV and IPTV operation. The deal is expected to close on 05 May and the parties will then announce the venture's name and reveal its corporate brand. The new firm will provide satellite-distributed pay-TV (DTH) and streaming services, as well as IPTV on open fibre networks, and will continue to develop television distribution.
As the companies said when they announced plans for the venture in October 2019, annual cost synergies are expected to reach approximately SEK 650 million, with full effect from 2022. Integration and other related costs are expected to be approximately SEK 900 million.
Telenor Group CFO Jorgen C Arentz Rostrup welcomed the Commission's approval. He said the venture will combine the respective strengths of Canal Digital and Viasat Consumer and that the synergies would benefit viewers and shareholders.
NENT and Telenor will provide services to the venture, including transponder capacity and technology, content and streaming services. The board of directors will have equal representation from NENT Group and Telenor, with a rotating chairperson.
The new company will have headquarters in both Stockholm and Oslo and will operate at an arm’s length from NENT and Telenor. It will be an open platform providing output from several providers and will act as a major distributor for NENT’s Viasat pay-TV channels, which will be rebranded as ‘V’ in June. It will also distribute free-to-air TV channels and the Viaplay streaming service. These will still belong to NENT and will be widely available on third-party platforms.
After closing of the transaction, Viasat Consumer will be deconsolidated from NENT Group and will be reported as an associated company. NENT will thereafter report its share of the net income of the joint venture as income from associated companies within its operating income. The transaction will give rise to a capital gain for NENT, which will be reported within Items Affecting Comparability.
The leadership team of the new company will be Bjorn Ivar Moen as CEO (currently CEO of Canal Digital and Telenor Broadcast), Jonas Gustafsson as CFO and head of operations (currently CEO of Viasat Consumer), Mahmoud Mustapha as CCO, Anna Pradzynska as chief marketing officer, Jon Espen Nergard as chief technology officer, Michael Barlin as chief content acquisition officer, Elisabeth Monrad-Hansen as chief people officer and Helge Olav Bergan as chief legal officer.
Gabriel Catrina, CFO at NENT, said the need for consolidation in the Nordic satellite pay-TV market has been clear for some time. This joint venture will create significant value both for customers and owners, while changing NENT’s financial profile and accelerating the growth of Viaplay. It has the potential to become a model for similar partnerships in other parts of the industry, she added.
