Richard Desmond to sell Channel 5 to Viacom

May 1, 2014 08.05 Europe/London By Robert Briel

Channel 5UPDATED. UK media entrepreneur Richard Desmond is selling Channel 5 to the US broadcaster Viacom for £450 million (€546 million) later today.

US media group Viacom, which owns channels including MTV, Nickelodeon and Comedy Central, has confirmed it will buy the UK’s Channel 5 Broadcasting Ltd. for £450 million from Desmond’s Northern & Shell Media Group.

Under the agreement, Viacom will acquire all brands and assets of Channel 5 Ltd., including TV channels Channel 5, 5*, 5USA, Milkshake! and Demand 5. The takeover will be financed by Viacom’s existing cash balances and is expected to be accretive immediately after closing, the company said.

“The acquisition of Channel 5 accelerates Viacom’s strategy in the UK, one of the world’s most important and valuable media markets,” said Viacom president and CEO Philippe Dauman.

“Channel 5’s momentum is indisputable, with impactful programming, increasing popularity and a growing digital platform. Channel 5’s management and employees have done an outstanding job building their brand and we are pleased to welcome them to our team. Viacom’s global resources, technology and expertise will help Channel 5 develop even more compelling programming and provide content to consumers in exciting new ways. In addition, we will introduce our popular content to new UK audiences and create a comprehensive offering for our commercial partners on-air and on-line.

“This deal will dramatically increase Viacom’s investment in content produced in the UK, which has a widely admired public service broadcasting culture and a globally influential production sector. We look forward to partnering with local producers to introduce more UK-created content to global audiences, and will continue to explore opportunities in the UK, both in the free-to-air and pay television markets.”

Paul Dunthorne, COO of Channel 5, said, “Since Northern & Shell’s acquisition of Channel 5 in 2010, the financial and operating performance of the business has been transformed with improved audiences and content offering. The combination of Channel 5 with Viacom’s global resources, technology and expertise adds further to the momentum of the business and offers numerous exciting opportunities for the channel’s future.”

Originally, Desmond was looking to sell the channel for as much as £700 million. He turned down a reported joint bid from Discovery and BSkyB for £350 million. Desmond bought Channel 5 from RTL Group in 2010 for £103.5 million.