Saudi Arabia’s Public Investment Fund (PIF) buys most of MBC Group for $2 billion as profits rise sharply
MBC Group announced that its main shareholder, Istedamah Holding Company, has agreed to sell its 54% share of the company to Saudi Arabia’s Public Investment Fund (PIF) for $2 billion (SAR 7.5 billion), according to a report on Sunday.
Stake Sale
Istedamah will sell all its shares in MBC to PIF, making PIF the main owner with control over the company.
In this private deal, each share is valued at $11.1 (SAR 41.6), and MBC is selling 179.55 million shares.
This move is part of PIF’s larger plan to grow its media investments and increase Saudi Arabia’s influence in regional media.
The sale will be completed once it gets the usual regulatory approvals, though no timeline has been provided.
Based in Riyadh, MBC is a major media company in the Middle East, running TV channels, radio stations, and digital platforms that broadcast news, entertainment, and sports to millions of viewers across the Arab world.
PIF’s purchase of MBC supports its Vision 2030 goals to reduce Saudi Arabia’s reliance on oil.
Led by Crown Prince Mohammed bin Salman, the fund, which manages assets worth over $700 billion, has been expanding in areas like entertainment, technology, infrastructure, and renewable energy, aiming to create jobs and promote growth within Saudi Arabia.
Financial Performance
MBC Group had strong financial results recently, even though its overall revenue dropped.
In the second quarter of 2024, MBC Group’s net profit grew by 66.5% compared to the previous year, reaching $31 million (SAR 116.4 million). This was achieved despite an 11.6% decline in revenue, which decreased to $256.8 million (SAR 963.9 million). The revenue drop mainly came from a 54.5% decrease in earnings from media and entertainment, totaling $37.1 million (SAR 139.1 million) for the quarter.
For the first half of 2024, MBC’s total revenue increased by 10% year-on-year to $586.1 million (SAR 2.2 billion), thanks to a 20.4% rise in broadcasting revenue and a 40.8% increase from SHAHID. Net income during this time jumped 359.8% from the previous year to $63.4 million (SAR 237.8 million), showing the company’s strong strategy in a tough market.
IPO Success
In December 2023, MBC raised $222 million (SAR 832.6 million) through its initial public offering (IPO) on the Saudi Exchange (Tadawul). The company offered 3,325,500 new shares, which is 10% of its total shares.
As of 1:00 pm AST on November 3, 2024, MBC’s share price rose 10% to $12.2 (SAR 45.75), giving the company a total value of $4.1 billion (SAR 15.2 billion).
Big Numbers
MBC’s subscription video-on-demand (SVOD) service saw a 36% increase in subscribers, reaching 4.6 million. The number of monthly active users on its advertising-based video-on-demand (AVOD) platform also grew by 8.4%, reaching 18 million as of June 30, 2024, according to the company’s earnings report for the first half of the year.
Published: 5th November 2024
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