EY survey signals uptick in media & entertainment M&As in 2017

M&A activity in the media and entertainment sector registered 56 deals with cumulative disclosed value of USD 1.8 billion in 2016 and upturn in M&A may continue in the first half of 2017, a report said today.
"In India, M&A activity in the media and entertainment sector registered a total of 56 deals with cumulative disclosed deal value of USD 1.8 billion in 2016, as against 56 deals with a total disclosed deal value of USD 1.2 billion in the previous year.
"The largest deal of the sector was USD 1.2 billion merger of Dish TV and Videocon D2H, which signals that consolidation is the way forward in the DTH space," said the report by global advisory services firm EY here.

The M&A outlook for the media and entertainment (M&E) sector is being driven by sector convergence and digital disruption, according to EY's 15th biannual Media & Entertainment Capital Confidence Barometer (CCB).
Sector convergence is the greatest disruptor to M&E businesses, according to 31 per cent of executives surveyed.
The report shows companies are expanding geographic reach in order to gain exposure to high-growth regions and under-penetrated markets.

Forty-two per cent of executives are targeting a cross-border acquisition in the coming year. The top five destinations for 2017 will be the US, France, the UK, Germany and China. Last year, before Brexit, the UK was No. 1.

Digital remains at the heart of corporate strategy in the sector. Nearly a third (31%) of the executives saw the impact of digital technology on the business model elevated on the boardroom agenda over the past six months, report said.
"During the year, digital marketing players were also high on the M&A radar, as media and e-commerce companies acquired them to gain technological capabilities and target consumers with customised advertisements.
"TV Broadcasting was another hot segment as players in the industry made acquisitions to strengthen their presence in the rapidly-growing segments of entertainment," said EY India Partner - Transaction Advisory Services, Media and Entertainment Ajay Shah.

More than 56 per cent of industry executives expect to pursue acquisitions in the next 12 months, up from 46 per cent six months ago. This appetite for deal-making remains well above CCB's long-term average of 45 per cent, pointing to an upturn in M&A in the first half of 2017. Executives expressed a high level of confidence in key deal indicators, the report added.