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STAR India acquires MAA TV's broadcast business for Rs 2.5k cr

Business Standard:  February 12, 2015

Hyderabad: STAR India, a unit of 21st Century Fox, has acquired the entire broadcast business of MAA Television Network Ltd for an undisclosed amount.

Sources told Business Standard the deal size could be about Rs 2,500 crore.

MAA TV has four Telugu entertainment channels — MAA Gold, MAA Music, MAA Cinema and MAA General Entertainment. It is estimated the promoters of MAA TV have invested about Rs 130 crore in the network so far.

In 2007, MAA TV, which commenced operations in 2002, was acquired by Nimmagadda Prasad and his associates. Prasad, an entrepreneur, had earlier sold Matrix Labs to Mylan.

The MAA TV acquisition gives STAR access to the Rs 2,000-crore Telugu television market, India’s second-largest regional TV market in terms of revenue. So far, STAR didn’t have a Telugu channel under its fold.

MAA TV Chairman Prasad said last year, the company’s market share was the 16th highest nationally and the highest in Andhra Pradesh and Telangana.

“The acquisition fills a vital gap in our portfolio, allowing our advertisers targeted access to a critical market,” STAR India chief executive Uday Shankar told the media here on Wednesday.

The deal will come into effect upon complying with the necessary regulatory formalities and the broadcast network of MAA TV, as well as its assets, will be integrated with STAR India’s business.

MAA TV, the company, will remain with its promoters — Prasad; actor-turned-politician Chiranjeevi and his relatives; and actor Akkineni Nagarjuna.

While Prasad has 65 per cent stake in the company, Chiranjeevi has 20 per cent and Nagarjuna 10 per cent; the rest is held by retail investors.

“They (the promoters) did not want to part with the company. Therefore, we will take over only the broadcast business. The MAA brand and other assets will also come to STAR,” Shankar said.

“The strategic decision to align with STAR India and be part of a global media group will be a big leap in our efforts to take MAA TV to the next level and strengthen the positioning of the MAA brand in the entertainment sector,” Prasad said.

On hiving off MAA TV after turning it into a profitable entity through six-seven years, Prasad said, “We don’t want to be unrealistic. When the time comes, it has to be handed over to a bigger, better entity.”

Shankar said STAR would not only retain the MAA TV brand but also its 500-odd employees. Besides, it would invest more on developing the content, as well as talent. “The Telugu market is an important one. However, the pace of innovation is slow. We are keen to change this by acquiring local presence and fundamentally changing the content quality paradigm,” he said.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

x IBEF : India Brand Equity Foundation