Top Italian commercial broadcaster Mediaset, which is being rebranded as MediaForEurope (MFE), is merging its Spanish subsidiary Mediaset Espana into MFE in a move long touted as the first step in its stated plan to gain scale in Europe.

The merger, which follows MFE’s bid last March to gain full control of Mediaset Espana, was approved by the two companies’ boards of directors, the broadcaster said in a statement late Monday. However, the deal still needs to pass a final hurdle.

The Mediaset Espana merger by absorption with MFE — which is mostly made up by Mediaset’s Italian unit — still needs to be approved by votes that will be held at their respective shareholders’ meetings in March. The merger is expected to become effective in the second quarter of the year.

MFE was formed in 2021 when Mediaset moved its legal headquarters to the Netherlands, changed its shareholding structure, and rebranded as MediaForEurope. The company, which generates most of its revenue out of Italy, last year secured control of roughly 83% of its Madrid-listed TV unit through a public tender offer for the stake in the Spanish subsidiary that it did not already own.

To reach full 100% ownership of Mediaset Espana, MFE said on Monday it now plans to propose investors a swap exchanging seven new MFE shares for each Mediaset Espana share.

“The process of developing MFE-MediaForEurope into a pan-European media group is proceeding as planned,” MFE CEO Piersilvio Berlusconi said in a statement.

He added that on completion of the merger, MFE “will have total control of the company’s Spanish and Italian operations, as well as being the main shareholder of the German listed broadcaster ProSieben-Sat1,” in which MFE holds a roughly 25% stake.

“This is further confirmation of the project for the progressive multi-country consolidation. A new group of national TV companies focused on the production of local content that will also be able to build a large-scale technological and commercial platform at European level,” the statement went on to note.

Nonetheless, although MFE holds a controlling ProSieben stake, the German giant’s top management has so far appeared to oppose Berlusconi’s proposals for collaboration.

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