Televisionpoint.com Correspondent | London JCDecaux, the largest outdoor advertising group in Europe, has scrapped its talks to buy News Outdoor Group, the Russian outdoor ad unit of News Corp.
The acquisition would have created the world's top billboard advertising group, and it is learnt that the credit crunch made it impossible to fund the deal.
JCDecaux said as recently as last week it was pursuing its plan to buy News Outdoor Group, in a potential cash and shares deal. Newspapers put a value of more than $ 1 billion on the unit. However the two groups said matters had changed.
"Both companies recognise that economic and capital market conditions have made it increasingly difficult to conclude strategic partnerships on this scale," they said in a joint statement, a month after first revealing the talks.
JCDecaux, which has a 40 per cent stake in Ukraine's largest outdoor advertiser, had been keen to expand in emerging markets, where News Outdoor was strong, particularly in Russia. A combination of the two businesses would have created a company with annual sales of about $ 3.3 billion, topping world leader Clear Chanel Outdoor.
JCDecaux has a market value of about $ 4.1 billion. Moscow-based News Outdoor is the sixth-largest out-of-home advertising company in the world.
Rupert Murdoch, chairman and CEO, News Corp has expressed nervousness about investments in Russia, where News Outdoor generated the bulk of its revenue about $ 385 million last year.
News Corp said in June 2007 it was mulling strategic options for News Outdoor including expanding its existing shareholder group through new strategic and private equity partners.
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