News Corp buys 9% stake in Rotana Group
Middle East media group owned by Prince Alwaleed Bin TalalNEW YORK -- News Corp. is making its first major investment in the fast-growing Middle East media market and deepening its relationship with Saudi Prince Alwaleed Bin Talal.
The conglomerate said Tuesday it has reached an agreement to buy a 9.09% stake in Rotana Group, a Middle East media group owned by Alwaleed, for $70 million.
It has an option to increase its stake to 18.18% in the 18 months following completion.
Alwaleed's Kingdom Holding owns a stake in News Corp. (which amounted to 5.7% as of last year), Time Warner, Apple and non-media companies in the U.S., such as Citi, although his worldwide holdings have declined amid the financial crisis.
The Rotana deal gets News Corp. a real presence in Middle East markets at a time when media giants have increasingly looked overseas for new growth opportunities as the U.S. and many European markets have become more mature.
Rotana hosts Fox channels in Saudi Arabia, owns rights to more than 2,000 Arabic movies in what is the region's largest film library and a music library. Saudi Arabia is the Arab world's biggest economy. Rotana also operates an expanding radio network and digital services.
The talks between the two media groups first emerged in the fall (HR 9/2).
"A stake in Rotana expands our presence in a region with a young and growing population, where GDP growth is set to outstrip that of more developed economies in the years ahead," said James Murdoch, News Corp.'s chairman and CEO, Europe and Asia.
Said Alwaleed: "This investment will strengthen our existing relationship, building Rotana's presence across the region and expanding its reach to the Arab Diaspora around the world."