Market Insight

Production giants Banijay and Zodiak to merge in latest mega-indie deal

July 29, 2015  | Subscribers Only

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International content producers Banijay and Zodiak have agreed to merge, a move that will create a new producer group generating revenues of around $1 billion, according to the companies. The new entity will span most major European markets and will also have interests in the US and a handful of other key territories, including Australia, India and Russia. Between them, the producers make shows and formats including Wife Swap, Keeping up with the Kardashians and Versailles.

The two companies, both of which are headquartered in France, have a common shareholder in the form of Italian investment group De Agostini, which holds a majority stake in Zodiak and a minority one in Banijay.

Our analysis

This merger is of course notable for its sheer size. It is also a continuation of the consolidation trend begun by the merger of rival production houses Endemol, Shine and Core in 2014 – although it should be noted that the value of Banijay-Zodiak is significantly lower. It points to a scaling-up: already-large and diverse companies are pursuing big deals with a new ambition, becoming not multi-million- but multi-billion-dollar entities. Furthermore, it is a sign that the prevailing wisdom about the best, most workable and most profitable size for a conglomerate producer is changing, with the key players becoming much larger.

The combination of Banijay and Zodiak is also notable, not for expansion into new and untried territories, but for the way it concentrates interests in Europe. The company will be particularly strong in France and Scandinavia, where it will control Air Productions, H20 Productions, Nordisk and Yellow Bird, among a total of 18 production houses. In France alone, the entity will own 10 separate companies, uniting the producers of Fort Boyard, Le Grand Journal and Versailles.

If the group is to expand into new territories, these opportunities lie in the English-speaking world, with Zodiak's strong UK interests – via holdings in several companies, including Bwark and RDF Television – now allied with Banijay’s US holdings Bunim/Murray and Stephen David Entertainment. Zodiak’s Versailles, a lavish drama produced in English for French pay broadcaster Canal Plus, may provide a hint of the internationalised, English-speaking programming that the new company could expand into.

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