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PwC: Media merger activity on the rise again

In the six months to mid-May 410 deals within the media industry were announced

According to the latest edition of PwC’s M&A update for the media industry, 410 deals were announced in the United States in the six months to mid-May.

Those deals were worth $83 billion, according to PwC, a significant increase from 61 deals in the second half of 2020 and just 32 in the first half of 2020. The value of the deal is the highest PwC said it has seen in years.

“Deal volumes continue to be driven by the internet and information, advertising and marketing and telecommunications subsectors,” the report said. “Private equity deals reached a new high in terms of both deal volumes and value, accounting for 43 per cent and 66 per cent, respectively.”

The report cites the AT&T/Discovery “super streamer” merger in May as “the biggest sign yet that telecom giants were reversing course on their plans to expand into the media space.

“It followed on the heels of Verizon’s disposal of HuffPost and Yahoo/AOL, T-Mobile’s discontinuation of its TVision streaming service and AT&T’s own spinoff of DirecTV into a joint venture with TPG Capital.”

At the same time, the streaming wars have media companies bulking up on content, The combination of WarnerMedia and Discovery is  one example. Another is Amazon’s purchase of MGM Studios for $8.45 billion

“Players in the media and telecom sector are starting to feel the stress brought on by the enormous capital requirements needed to compete and maintain relevance during this period of transformation, leading to a wave of asset reallocation,” said Bart Spiegel, media and telecom deals partner at PwC.