AMC buys Liberty’s Chellomedia for €750 million

AMC Networks has reached an agreement to buy Liberty Global-owned channel operator Chellomedia for €750 million.

The deal hands US-based AMC an extensive array of channels that are distributed to nearly 400 million homes in 138 territories.

Chellomedia is the international content arm of John Malone’s Liberty Global, while AMC has emerged a leading cable channels provider and content producer in the US and has been expanding its international operations through its AMC/Sundance Channel Global division.

This means networks such as Canal Hollywood, MGM, Film Café, Buzz Horror Channel, Extreme Sports Minimax, Historia and Outdoor will all sit along side AMC, WE tv, IFC and Sundance Channel in the AMC Networks stable. Chellomedia’s stakes in its joint ventures with CBS Studios International, A+E Networks, Zon Optimus and other partners are also included.

However, Liberty will keep its Dutch premium channels business, which comprises the Film1 and Sport1 channels.

The deal is expected to close in the first quarter of 2014 and subject to unspecified limited closing conditions. It is now subject regulatory approval.

Liberty Global said the assets it is selling generated revenue of around €350 million in the 12 months to June 30.

Liberty president and CEO Mike Fries called the deal “great” for both parties and added: “For Liberty Global, this transaction is attractive from both a valuation and liquidity perspective. It also simplifies our business and allows us to focus on our core markets and more strategic programming opportunities.”

“Chellomedia has developed a remarkable portfolio of popular channels that reach hundreds of millions around the world,” said Josh Sapan, president and CEO of AMC Networks. “As AMC Networks has expanded internationally, we have had a great desire to do something we consider fundamentally strategic, which is to take our content and put it on channels we own.

“This acquisition allows us to secure a large, global platform on which to distribute our increasingly successful original programming through a collection of strong, well-established and well-managed assets worldwide.”

Chellomedia President Niall Curran added: “AMC Networks are content professionals with an excellent creative and business track record. They are highly enthusiastic about the business we have built at Chellomedia and are ambitious to develop it further, making AMC Networks a great owner and partner for Chello’s next phase of growth.”

Morgan Stanley acted as financial advisor to Liberty, while Guggenheim Securities acted as lead financier for AMC. Merrill Lynch will provide debt financing for the deal as served as an advisor on the agreement.