2 European Broadcasters Plan Merger, With Eye on U.S. Market

LONDON —  By seeking to create the largest television company in Europe, British media group Pearson and regional broadcaster CLT-UFA are also laying the groundwork to bid for a bigger slice of the U.S. TV market.

Pearson, publisher of the Financial Times newspaper and the Economist magazine, and CLT-UFA announced plans Friday to merge their television operations.

The combined company, which would be worth an estimated $19.2 billion and have annual revenue of about $3.6 billion, would have the broadest reach of any TV or radio broadcaster in Europe. But the ambitions of its executives appear to extend across the Atlantic.

“They claim they’re keen to get into the American market,” said Louise Barton of brokerage Investec Henderson Crosthwaite.

CLT-UFA is owned jointly by German media powerhouse Bertelsmann and a Luxembourg-based holding company, Audiofina. Belgium’s Group Bruxelles Lambert has a 72% stake in Audiofina. Under the deal, Pearson and Bertelsmann would merge their broadcasting and TV production operations into Audiofina.

CLT-UFA has interests in 22 television channels with 120 million daily viewers, plus 18 radio stations with an estimated 25 million daily listeners. It also operates a business marketing the broadcast rights of 40 national soccer teams and 250 soccer clubs across Europe.

Pearson Television has about 160 television programs in production in 35 countries.

The merger requires the approval of European regulators in Brussels. The companies have not said when they expect the merger to be completed.

“I think it’s a fantastic deal,” said Paul Richards, an analyst at investment bank WestLB Panmure. “Strategically, it’s flawless.”

The merger would combine Pearson’s TV programming with the “very best” pan-European distribution, bolstering what had been one of the few weaknesses in Pearson’s media operations, Richards said.

Pearson has been trying to freshen up its TV lineup, said Jeremy Andrews, an analyst at London brokerage Greig Middleton & Co. Among its top offerings are the U.S. series “Baywatch” and a British police drama called “The Bill.”

“This deal puts Pearson Television at the heart of one of Europe’s most extensive--and most popular--broadcasting networks,” said Pearson’s chief executive, Marjorie Scardino. “We also see the chance for other parts of Pearson to work with this new company to cross promote our brands and content through all media.”

Pearson already owns All American Communications Inc., a Santa Monica-based firm that produces “Baywatch” and several TV game shows.