Time right for Arab media mergers - expert

MERGER TIME: The time is right for consolidation in the Arab media industry, a media chief said on Monday. (Getty Images)

The time is right for consolidation in the Arab media industry but a lack of transparency will stop any major mergers from taking place, the head of regional media giant Saudi Research and Marketing Group (SMRG) has said.

"The time is very ripe," chief executive Azzam Al Dakhil said about the prospects for mergers in the region's media sector.

Riyadh listed SMRG, whose flagship titles include Arabic daily Asharq Al Awsat and English language Arab News, is the only Arab media firm to be publicly listed.

Advertising revenue in the UAE, the Middle East's largest single market, fell by 14 percent in the first quarter of the year amid a sharp slowdown in the country's real estate sector, according to data from the Pan Arab Research Centre.

Turnover in the less developed Saudi market gained 2 percent in the same period.

Al Dakhil said it made sense for publishing houses to merge parts of their distribution chains. Using fewer cars to distribute newspapers could dramatically cut costs, he said.

But a lack of transparency and reliable data on privately held companies may prevent the major players from merging their operations completely.

Discounts are common in the region's media sector and many ads are not paid for at all, he claimed.

Abdullatif Alsayegh, chief executive of the Arab Media Group (AMG) said his company is in talks with several parties about possible mergers and collaborations, but declined to name which ones.

"We have always been talking to different parties about mergers and acquisitions. What I care about is the industry. If the industry is growing then we are going to grow automatically," he said.

“We are surviving right now. Don’t [merge] because there is a financial situation, do it because you want to become stronger.”

AMG holds the Middle East franchise for satellite TV channels MTV and Nickelodeon and is the owner of UAE dailies Al Bayan and Emirates Business 24/7.

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