Aussie group finalises merger

SYDNEY: Cinema advertising company Media Entertainment Group (MEG) will be folded into Val Morgan following a friendly merger between the two Australian companies. The takeover occurred as MEG was losing money because of price competition and management instability. Its two major shareholders Consolidated Press Holdings and Publishing & Broadcasting, both controlled by Australian media tycoon Kerry Packer, decided to rectify the situation by combining MEG with the more profitable Val Morgan, which has been expanding overseas. Val Morgan will focus solely on cinema advertising and plans to step up its international expansion. "Val Morgan has a very good franchise so it makes sense to roll it out overseas rather than try and reinvent the wheel by moving into other ad mediums," said David Rouse, executive director of Val Morgan and former managing director of MEG. Terry Savage, Val Morgan executive chairman, said advertisers would benefit from the merger as the company had more resources to invest in the old MEG business. The company has commissioned research on cinema advertising - to ensure the medium is more accountable - and has launched a new media kit, something MEG was unable to do because of shaky finances. Savage said cinema advertising was increasingly becoming a global business because the international cinema chains were looking for ad sales partners to work with them globally. Within the next few years, he predicted the market would be controlled by about three key players - Val Morgan, Carlton Screen Advertising and RMB International.

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