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India among top 5 media markets for global M&A deals in 2017: BDO

Television Post |

28 February 2018

India was among the top 5 target regions for media & entertainment acquisitions in 2017 alongside US, Asia Pacific, Western Europe, and Canada. The country’s merger & acquisition (M&A) deal share along with Canada was the fourth largest at 3%, according to a report by accounting firm BDO titled ‘MEDIAtalk- The Future is bright in India’.

M&A deals in 2017 have ranged from $24 million to $120 million, which included the acquisition of 9X Media and INX Music by Zee Entertainment, SVG Media by Dentsu Aegis Network and Zapr Media Labs by Hotstar.

While the US remained the most attractive target region for media acquisitions in 2017, however, the percentage of global deals targeting the US dropped from 35% in 2016 to 29% in the year.

With global media deal flow up this year, the balance had been absorbed by fast-growing regions such as the Asia Pacific, which increased its share of global deals on a target basis from 21% in 2016 to 26% in 2017. China and Japan led the way, as South Korea also put in an impressive performance.

India was at the sixth position in terms of global M&A deals by the top acquirer region. The country had 2% share of the global media acquisition in 2017. The US continued to dominate media acquisitions in 2017, but its market share declined by 2% as compared to 2016. Meanwhile Asia Pacific, Western Europe, Canada and the UK all increased their appetite for acquiring media businesses in 2017.

US-based companies led the acquisition of India-based media businesses with 45+ acquisitions between 2008-17. Europe-based companies made almost 20 acquisitions followed by UK (18) and Canada (4). The report also stated that India was the second most targeted region for acquiring media-related businesses by global communications giants like Dentsu and WPP.

The report stated that there were 20% more acquisitions from North America and Europe recorded in the last five years, as compared to the five years prior to that.

Foreign investors are excited about the size of the India media and entertainment market. The country has 183 million TV homes, 1.3 billion people, a middle class that is rising, as well as multiple megacities and urban areas.

The report also noted that the majority of India’s urban consumption comes from non-metro cities (Tier 2 and Tier 3 towns) — regional markets with distinct cultures, languages and content preferences.

It also mentioned that the Indian print industry remains uniquely strong on the back of growing demand from regional markets despite the challenge from digital.

Burgeoning mobile internet and smartphone penetration have given rise to an alternative screen for media consumption in India, which is still dominated by single television households, it stated. Mobile advertising has emerged as the third largest advertising medium in India after television and print advertising.