Spain's Antena 3 Merges With Rival Broadcaster La Sexta

MADRID - Spain's Antena 3 and rival broadcaster La Sexta announced late Wednesday a merger that revamps the Spanish television landscape and sees the smaller La Sexta absorbed into the Antena 3 Group.

La Sexta shareholders will receive 7 percent of the newly formed group, with an additional 7 percent maximum through staged, completed objectives from 2012-2016 linked to the newly formed group's performance. Previous to the consummated merger, Antena 3 shareholders will increase the group's capital through an emission of new stock.  

The move will be submitted for regulatory permission as well as for approval from Antena 3's shareholders in the first quarter of 2012.

Under the terms, Antena 3 will assume 70 million euros ($90.8 million) of La Sexta's debt, but will corner 25.7 percent of the television audience and go head to head with sector leader Mediaset, which took full control of Prisa's free-to-air channel Cuatro earlier this year giving it the undisputed lead with 26.4 percent of the audience share.

A merger between the two has been in the works for two years and is seen as commercially desirable, particularly after Mediaset Espana acquired smaller Spanish rival Cuatro earlier this year and merging their advertising portfolios into one company.

La Sexta's November 7.2 percent audience share compares to Antena 3's 18.5 percent share, which sits behind pubcaster Television Espanola and Mediaset's main channel, formerly known as Telecinco.

According to the latest figures, Antena 3 would now corner 41.6 percent of advertising investment on television, compared to Mediaset's 43.5 percent.

The Spanish Association of Advertisers immediately decried the news as "creating a duopoly" that will have "awful consequences."