SBS Acquires Central European Media

Merger-mania continues in Europe, with former archrivals
SBS Broadcasting S.A. and Central European Media Enterprises Ltd. (CME) set to become one.

SBS agreed to acquire troubled CME last week for $615
million. CME's shareholders, which include cosmetics millionaire Ronald Lauder, will
retain 33 percent of the merged company, which will be known as SBS Broadcasting.

"It is difficult to imagine a more attractive platform
for a pan-European broadcaster," SBS chairman and CEO Harry Evans Sloan, who will
head the merged company, said in a prepared statement.

The combined firm will be Europe's largest
broadcaster, with 18 TV stations and 12 radio stations. SBS said it will be "the
third-largest buyer of TV programs in the world."

In a recent report, Prudential Securities Inc. said SBS has
"substantial upside in profitability," and its operating margins could double
this year.

However, absorbing CME will not be without its challenges.
CME has had a troubled time over the past year since former CEO Len Fertig left the

His replacement, Michel Delloye, left March 24, and he was
succeeded by CME chief operating officer Fred Klinkhammer.

Over the past year, founder Ronald Lauder has had to
contribute a reported $22.7 million in extra funding to compensate for deep losses
prompted by tough times in Russia and CME's other Eastern European markets.

Sloan, in the prepared statement, said the combined
portfolio of SBS and CME is valuable, and it includes "developmental franchises that
are second to none in terms of territorial reach and growth potential."