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.
