Peru’s Latina and Panamericana television channels have announced a strategic alliance in merging operations.
The two broadcast networks rank second and fourth among Peru’s five national channels with 30% and 6% market shares respectively in advertising revenue. Their combined marketing revenue give the new company a 36% market share, one point behind the country’s leading network, America TV, and 10 percentage points ahead of third-place network, ATV.
The two channels announced the merger yesterday via social media and in simple image press releases that shocked the media industry. Officials at both networks confirmed there was no purchase or exchange of company stock.
“There was no equity purchase,” said Panamericana chief executive Leonardo Bigott. “This is a strategic alliance to unite synergies and leverage the strengths of both channels to offer a more complete platform with better content.”
Television analyst Eduardo Velasco says the alliance could be motivated by Latina’s need to find a place to air some of its popular programming. For its part, Panamericana lacks sufficient capital to invest in new programming and broadcasting infrastructure. Latina brings financial weight to the partnership after being purchased by private equity firm Grupo Enfoca in 2012.
Some economists have used the merger to call for an antitrust oversight authority in Peru’s government.
The merger comes as television advertising expenditures in Peru are expected to fall 10% to 12% in 2016 due to the 2016 elections. However the television business in Peru has seen strong growth since a low of near collapse in the late 1990s.
“I’m not sure that [the Latina-Panamericana merger] necessarily represents a threat, but we should examine how much it will affect the market,” Tavara said. “Unfortunately, we have no control mechanism because both lobbyists and lawmakers have prevented the necessary legal framework.”
“The local beer market is highly concentrated, not by consumer preference but because companies were allowed to buy up competitors to create a monopoly for years,” says PUCP economist Jose Tavara. “Peru currently has the highest prices among the regional average and the pockets of shareholders are full with the consumer’s money.”
Sources
Latina-Panamericana tendrá 36% del mercado publicitario en TV (El Comercio)
El negocio de la televisión vuelve a ser rentable en el Perú (El Comercio)
Gerente de Panamericana: alianza con Latina no implica compra (Semana Economica)
Latina y Panamericana: urge contar con un control previo de fusiones (Poder)
Latina y Panamericana ahora son uno y llevan todo al siguiente nivel (Panamericana)
