Time Warner will acquire 19 million newly issued CME shares, accounting for an approximately 31% stake in the Central and Eastern European media company, which operates several television stations in the Czech Republic, Romania, Slovakia, Slovenia, Croatia, Ukraine and Bulgaria.
Also, CME and Warner Bros studios, the famous Time Warner division, will partner up to launch and operate new thematic television channels in current CME territories. These channels, some of which will be Warner Bros. branded, will feature international films and television series, including titles from Warner Bros.’ industry-leading library.
"I’m confident that this alliance with Time Warner will accelerate CME’s future development and take it to levels I could only dream of fifteen years ago. The combination of CME’s market leading positions and Time Warner’s brands will enhance the prospects of both companies as we work together,” said Ronald Lauder, founder and main shareholder of CME, a company that posted revenues of over $1 billion last year.
Time Warner Chairman and CEO Jeff Bewkes said the transaction with CME is a unique opportunity for us to invest in – and partner with – the leading media company in Central and Eastern Europe.
While the region has been experiencing the impact of the global economic crisis, we believe CME is ideally positioned over the long term as Central and Eastern Europe returns to significant growth and the media sector in these countries continues to evolve.
CME President and Chief Operating Officer Adrian Sarbu said the success of CME is driven by its strong local management teams and their ability to create content that meets the expectations of the local audiences.
"Time Warner and Warner Bros. are recognized leaders in the content business and have the skills and experience necessary to enhance the quality of our local programming,” Sarbu said.
CME was founded 15 years ago by American businessman Ronald Lauder, who anticipated the opening and development it would have in Central and Eastern Europe after the fall of communism.
In Romania, Lauder partnered up with Adrian Sarbu to launch PRO TV, which is currently the most successful media brand in Romania. CME currently owns 95% of PRO TV SA, which operates stations PRO TV, Acasa, Pro Cinema, PRO TV International, Sport.ro and MTV Romania. The remaining 5% belongs to Sarbu, owner of media group Media PRO, which controls, among others, news agency MEDIAFAX and business daily Ziarul Financiar.
Sarbu, who started PRO TV 14 years ago, now runs the entire CME group.
CME is traded on the NASDAQ and the Prague Stock Exchange and has a market value of $423 million.
Time Warner is the world’s leading media group, with a current market value of $28 billion.