Anita Davis
Oct 15, 2009

VisionChina to acquire Digital Media Group

BEIJING - Out-of-home digital ad network VisionChina Media is to acquire mobile TV advertising firm Digital Media Group (DMG) for US$160 million, creating the largest bus and subway mobile television advertising network in the country.

VisionChina to acquire Digital Media Group
The acquisition, which has been approved by the two companies' boards of directors, is slated to take effect in the first quarter of 2010, with the financial transaction to take place in three instalments over two years through an exchange of both cash and stocks.

In the deal, VisionChina will gain access to DMG's 34,000 digital screens across 32 subway and high-speed train lines and bus shelters. VisionChina, meanwhile, has 82,349 digital television displays on mass transportation systems in 18 cities in China. Following the completed merger, the company will operate bus networks in 18 cities across China, including Beijing, Guangzhou and Shenzhen; and will have exclusive subway rights in eight cities, including all four first-tier cities in the country and on Hong Kong's Airport Express line.

According to Analysys International, as of the first half of 2009, VisionChina Media was operating more than 42 per cent of the digital mobile television screens in China, DMG more than eight per cent. 

"The combined company's fully integrated advertising network will deliver real-time television programming to passengers during their commutes, further strengthening advertising value for our clients," said Limin Li, chairman and chief executive officer of VisionChina Media, adding that the merger positions the company for further expansion and better enables it to capitalise on traffic during the 2010 Shanghai Expo.

"By giving VisionChina a strong foothold in all four of China's tier-one cities, where approximately 60 per cent of China's advertising dollars are spent, as well as immediate access to the important Shanghai market, this transaction is a great step forward in VisionChina Media's strategic expansion plan and should create strong shareholder value in the near term," said Scott Chen, VisionChina Media's chief financial officer.

Source:
Campaign China

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