Media M&A Transactions Topped $150 Billion in ’08

NEW YORK: The value of merger and acquisition activity in the U.S. media and entertainment sector was $150.8 billion in 2008, according to PricewaterhouseCoopers’ 2009 M&A Insights on the Entertainment and Media Industry report, with 1,000 completed transactions, down 17 percent from the 1,202 completed deals in 2007.

There were 1,000 completed transactions last year, down 17 percent from the 1,202 completed deals in 2007. The research adds that the value of last year’s M&A activity was led by four "mega" deals first announced in 2006. Excluding those transactions, the total disclosed deal value falls to $74.6 billion. E&M transaction activity in 2009 is forecast to be significantly less than the previous two to three years, given current economic conditions. However, Thomas Rooney, PwC’s Transaction Services Entertainment & Media Leader, commented: "With M&A activity ingrained in the DNA of so many companies and the ever growing presence of private equity, E&M deal activity might not be as quiet as many expect in 2009. While the overall value of closed deals will remain below the high water marks of 2007 and 2008, overall transaction volume may prove a bit more resilient. History has shown the E&M industry to be one of the more active M&A sectors irrespective of market and economic conditions."

In light of current conditions, PwC expects the trend of divestitures to continue as E&M companies focus on core businesses. In addition, risk-averse acquirers will likely focus on small and middle-market ‘bolt on’ deals in 2009. PwC also reports that while private-equity money accounted for about 43-percent of deal activity last year, those investors are likely to remain quiet in 2009.