German TV broadcaster ProSiebenSat.1 Media said on Wednesday it bought rival SBS Broadcasting for 3.3 billion euros ($4.4 billion).
The combination of ProSiebenSat.1 and SBS, both majority-owned by private equity firms KKR and Permira, will create a pan-European rival to RTL Group, owned by German media group Bertelsmann.
ProSiebenSat.1 said the purchase would be financed entirely with new syndicated loans from a group of banks led by Bank of America, Calyon, Credit Suisse, HypoVereinsbank, JPMorgan, Lehman Brothers, Morgan Stanley and Royal Bank of Scotland.
The transaction was not subject to approval by antitrust or media regulators and the share purchase agreement would be completed by the beginning of July, it said, adding that projected synergies from the merger would be between 80 million and 90 million euros per year.
Dutch Telegraaf Media Groep (TMG), which holds 20% of SBS, has an option that would give it 6% of the ProSiebenSat.1 Group's share capital, ProSiebenSat.1 said.
ProSiebenSat.1 received shareholder approval late in March to evaluate a takeover of SBS, which is active in the Netherlands, Scandinavia and eastern Europe.
The company posted sales of more than 1 billion euros last year and earnings before interest, taxes, depreciation and amortisation (EBITDA) of 207 million euros. It was bought by Permira and KKR in 2005 for $2.5 billion.
The new group would be Europe's second-biggest television provider, active in 13 European countries and owning assets including 24 free TV stations, 24 pay TV stations and 22 radio networks, ProSiebenSat.1 said.
Revenues would increase by 48%, to 3.1 billion euros from 2.1 billion, and EBITDA would rise 43% to 691 million euros from 484 million, it added.
The new group would retain the name ProSiebenSat.1 Media AG and be headquartered in Munich.