Cable Consolidation Crosses Provincial Lines 中国广电行业跨省并购案

By newsdoug on June 10, 2011

Boosting China's cable TV ties China is plugging ahead with its determination to consolidate the country’s fragmented cable TV industry, aiming to build a national digital entertainment leader despite strong resistance from entrenched provincial interests. In the latest development on this front, local media are reporting that Hunan TV & Broadcast (Shenzhen: 000917) has agreed to buy 49 percent of Baoding Pascali Broadcasting, a major operator in nearby Hebei province. (English article) This deal looks significant as it’s one of the first publicly announced cross-provincial purchases I’ve seen in this latest consolidation drive, which began earlier this year. (previous post) By comparison, consolidation within a province looks relatively easy as local party bosses and government officials exercise considerable authority throughout their regions. The same can’t be said for the national government, whose control is much weaker at the provincial level, thereby posing what could become a major obstacle for national cable consolidation. I previously pegged the chances for success of this latest campaign, following a failed effort five years ago, at around 30-40 percent, and later upped that to 50 percent when there appeared to be some signs of movement. (previous post) I’ll revise that to 55 percent in light of this latest development. But big obstacles still remain despite this positive case, and one should note the Hubei company didn’t get an outright majority stake in the deal. With China coming under growing international pressure to make its media market more open, perhaps Beijing is realizing the only way it can ever hope to build any world class competitors in this space is through this kind of consolidation.

Bottom line: The purchase of a Hebei cable operator by a Hunan rival marks a significant cross-province tie-up in China’s latest cable TV consolidation drive, but many obstacles still remain.

虽然受到来自地方的阻力，但中国政府仍决心大力整合有线电视行业，旨在创造一个全国性的数字娱乐媒体巨头。据当地媒体报导，最近的一个举动是，湖南电广传媒<000917.SZ>已同意收购保定百世开利49%的股权。这笔交易意义重大，因为这是我在这场年初开始的整合大潮中看到的首个公开宣布的跨省并购案之一。相比之下，省内的并购相对要容易一些，因为地方党政机关部门对其所管辖的区域能施加相当大的权力。但中央政府对地方的控制力就会相对弱一些，这将对跨区域整合造成相当大的障碍。我以前曾经觉得这种交易的可能性也就有三四成，後来发现有些进展迹象後，我将成功机率提高到50%，鉴於最新的这个进展，我再次将成功机率上修为55%。虽然这笔交易成功了，但一些大的障碍仍然存在，而且应该注意到的是，该公司并没有得到多数股权。如今中国在开放媒体市场方面受到越来越多来自国际社会的压力，中国政府也意识到，只有通过这种整合方式，才能在媒体领域打造世界级的公司。

一句话：湖南电广传媒购买河北这家有线电视运营商的举动，标志中国有线电视跨区域整合终有斩获，但障碍依然存在。