Silver Spring, MD, United States (4E) – Discovery Communications Inc. announced that it purchased a controlling stake in TFI Group’s Eurosport International as the media firm continues to expand its business abroad.
Both companies said on Tuesday that the deal is a continuation of a larger strategic partnership that goes all the way back to December 2012. The sale raises Discovery’s interest from 20 percent to 51 percent and speeds the original agreement by almost a year.
The transaction is based on Eurosport Group’s average enterprise valuation of around $1.2bn. Under the agreement, TF1 will keep the ability to exercis a put option over the remaining 49 percent, which would potentially bring Discovery’s stake up to 100 percent, according to both firms.
The announcement confirms last week’s report by The Wall Street Journal stating that Discovery was in discussions to boost its stake in the Eurosport network, citing a source with knowledge of the plan.
Discovery, which owns the Discovery Channel and Animal Planet, is focusing on overseas expansion, which had been its focus before merger talks with Scripps Networks Interactive Inc. began, though they fell off earlier this month, according to the WSJ report.
In October, Discovery reported a 24 percent increase in third-quarter profit as recent acquisitions helped results, lifting the stock price by 19 percent in the last 12 months.