News Corp. buys 9 percent of Mideast's Rotana

News Corp., the parent of Fox News Channel and distributor of “Avatar,” said it will acquire a 9.1 percent stake by buying newly issued shares in Rotana, which is headed by Saudi billionaire, Prince Alwaleed bin Talal. The New York-based media company said it has an option to boost its Rotana holding to 18.2 percent within 18 months.

The deal gives News Corp. a firmer toehold in the rapidly developing but fragmented Middle East media market, which has witnessed an explosion in cable and satellite television programming in recent years.

“A stake in Rotana expands our presence in a region with a young and growing population, where (economic) growth is set to outstrip that of more developed economies in the years ahead,” James Murdoch, chairman and CEO of News Corp.'s European and Asian operations, said in a statement. “Rotana is a leading player in the Middle East and we look forward to working together.”

The deal will also give News Corp. two seats on the Mideast company's board, spokeswoman, Alice Macandrew, said.

Rotana, which bills itself as the Arab world's largest music producer, boasts many of the region's biggest stars, including Egyptian singer Amr Diab and Lebanese diva Elissa. It also operates a number of music and movie satellite channels and controls a film library of more than 1,500 Arabic movies.

Alwaleed, who also heads Saudi investment firm Kingdom Holding Co., is a longtime investor in News Corp., with a stake of about 7 percent of the company, according to a recent United States Securities and Exchange Commission filing. That makes him News Corp.'s biggest shareholder after members of the Murdoch family.

Rotana already distributes Fox films in the Middle East through an earlier deal with News Corp.

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