Discovery pays $1.7 billion for global expansion

• Discovery expands international operation with $1.7 billion deal
• If approved, the deal includes 12 TV and 19 radio stations in Nordic countries
• Discovery is in talks with TF1 to buy Eurosport and TV stations

Discovery Communications is stepping up its global expansion and programming diversification plans in Europe.

Discovery said Friday it agreed to buy SBS Nordic, an operator of 12 TV and 19 radio stations in Nordic countries, for about $1.7 billion from ProSiebenSat.1 Group, Germany's largest TV company.

The acquisition expands the Silver Spring, Md.-based company's lineup of programs to include general entertainment, scripted, and sports programming for the first time.

The deal is subject to regulatory review and is expected to close in early 2013.

SBS Nordic, which has four networks in Norway, has a 34% share viewership there. In Sweden, its two networks have a 22% share. Its four networks in Denmark snag a 19% share. SBS Nordic's operations include two networks in Finland. The deal also includes several digital properties.

The channels "will expand Discovery's footprint across the Nordic region, which includes some of the most well-penetrated and stable TV markets in the world," David Zaslav, CEO of Discovery Communications, said in a statement.

Discovery has been acquiring foreign media companies for years and owns 153 networks worldwide. "The acquisition of SBS Nordic is a continuation of Discovery's more than 20-year strategy of investing internationally," says Mark Hollinger, CEO of Discovery Networks International.

Separately, Discovery and TF1, a French media company, are negotiating several investment deals with TF1's properties that will lead to a strategic alliance in three key areas.

• Sports. The plans call for Discovery to pay $221.6 million to TF1 for a 20% stake in Eurosport Group, a pan-European sports channel. Once the deal is completed, the companies say they will jointly seek "complementary capabilities" in content, particularly in Europe.

Discovery also would have the option of raising its interest to 51% in two years. If Discovery exercised its option, TF1 would have the ability to sell the remaining 49% to potentially increase Discovery's ownership to 100%.

• Pay-TV content in France. The companies also plan "to enhance" production of documentary and current affairs channels in France. Discovery would pay $18.2 million to buy a 20% share each in four pay-TV channels in France, including TV Breizh, Histoire, Ushuaïa TV and Stylía. Discovery will also receive an option to increase its stake to 49% in two years.

• Production activities in France. The proposed alliance would pave the way for the creation of magazine and documentary programs via TF1 Production, a programming content producer that is wholly-owned by TF1.