ProSiebenSat.1, SBS to Merge

MUNICH, June 27: ProSiebenSat.1 Media is acquiring SBS
Broadcasting in a 3.3 billion euros deal that will create a pan-European
broadcasting entity to rival the RTL Group.

Both companies are majority owned by the private equity
firms KKR and Permira. The merger is expected to save the combined company
between 80 million euros and 90 million euros. The closing of the transaction
is not subject to approval by antitrust or media regulators.

“This transaction is a major step into the future for the
ProSiebenSat.1 Group,” said Guillaume de Posch, the CEO of ProSiebenSat.1
Media. “Both geographically and strategically, the SBS Broadcasting Group is
the perfect fit for ProSiebenSat.1. The SBS acquisition is an investment in
growth, and will allow us to diversify our revenue sources still further. The
combination of ProSiebenSat.1 and SBS creates a pan-European broadcasting
platform with the proven skills and resources to expand activities in the
respective new geographical markets and to invest in additional channels,
online services and content creation.”

De Posch continued: “It is all about content. We will
achieve a greater critical mass, which will allow us to produce a broader
selection of high-quality programming throughout our European footprint. The
combined group will be able to operate more efficiently and aims to boost the
EBITDA margin from 22.2 percent to between 25 and 30 percent over the next few
years, thus generating additional funds to invest in growth.”

With the acquisition, Patrick Tillieux, the acting CEO of
the SBS Broadcasting Group, becomes COO of the new ProSiebenSat.1 Media, with
responsibilities for international TV, radio, print and group operations.

He said of the deal: “We’ll share resources on a group-wide
basis, leverage our purchasing and sales power, adopt best practices, and
centralize a number of functions. This will give us economies of scale, improve
our access to rights, and expand our presence in the advertising market.”

The post-merger ProSiebenSat.1 Media will continue to be
based in Munich. It will be active in 13 European countries with 24 free-TV
stations, 24 pay-TV stations, and 22 radio networks, among other assets. The
ProSiebenSat.1 Group will expand its reach to more than 77 million European TV
households.

The company may get a new strategic shareholder in mid-2008;
Telegraaf Media Groep, which held 20 percent of SBS Broadcasting, has an option
to reinvest in the new group and to acquire 12 percent of the voting common
stock held by Lavena Holding 5, which is controlled by Permira and KKR. Upon
exercise of the option, Telegraaf Media Groep would hold 6 percent of the
ProSiebenSat.1 Group’s share capital. Lavena Holding 5 would then hold 44.7
percent of the share capital and 76 percent of the common stock, compared to
the former 50.7 and 88 percent, respectively.