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The value of mergers and acquisitions in Europe’s media industry jumped 51 per cent to €24.7bn ($29.8bn) last year and should rise again in 2006, to €30bn, according to a PwC study.

The continued convergence of old and new media will prompt further corporate activity, the consultancy predicts, following a spate of activity at the end of last year in which traditional publishers and broadcasters bought online assets.

Pan-European consolidation is more likely this year, after a number of domestic deals in the second half of 2005.

Marketing services agencies will also acquire more digital agencies as they seek to capture the rapidly growing portion of corporate marketing budgets now being spent online.

Private equity investors had accounted for €9bn worth of last year’s transactions, up 25 per cent. “We predict that this will continue throughout 2006, not only in publishing but in broadcasting, digital media and creative business models,” the study concluded. Broadcasting was the most active media sector last year, with deals in digital television and third-generation mobile technology.

Olivier Wolf, head of PwC’s UK entertainment and media practice, said: “Private equity investors are increasingly comfortable in the broadcast space, and this pattern looks set to continue throughout 2006 due, in part, to their vigorous appetite for deals and the opportunity to exit from investments due to the healthy valuation environment.”

This week, a consortium of seven private equity groups indicated it would be prepared to buy VNU, Dutch owner of the Nielsen audience measurement businesses, for €7.3bn. Private equity groups are among those circling Daily Mail & General Trust’s UK regional newspaper portfolio, worth an estimated £1.2bn-£1.5bn.

PwC said the widely-expected infusion of US investment had not happened last year, with Australia’s Macquarie Capital Alliance Group leading the list of non-European bidders thanks to its €1.8bn purchase of the Yellow Brick Road directories business and smaller acquisitions of TDC Forlag and BBC Broadcast.

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