Viacom in Talks to Buy a Stake in Kirch Group

Viacom Inc., the world’s fourth-largest media company, is in talks to buy a stake in Kirch Group, Germany’s second-largest media company, according to Saudi Prince Al Waleed ibn Talal ibn Abdulaziz al Saud.

The prince, who has holdings in several media companies, said Viacom Chairman Sumner Redstone asked him to broker the transaction last week.

“He wants to invest in Kirch and wants us to mediate,” Al Waleed said in an interview here.

Viacom already has ties with Kirch through a 1996 agreement under which Viacom sold it rights to all new films and TV shows produced by Viacom’s Paramount division.

Viacom confirmed that Redstone met with Al Waleed.

Munich-based Kirch, which is closely held by founder Leo Kirch, has also formed alliances with other major media companies. Earlier this year, it teamed up with Mediaset, Italy’s leading commercial TV company, in a joint venture to create the first Pan-European TV network.

In May, Lehman Bros. Holdings Inc. bought a stake in Kirch, joining Italy’s Fininvest, which controls Mediaset, and Al Waleed as outside investors. They each own 3.1% of Kirch.

Al Waleed also owns a 2.3% stake in Mediaset. Earlier this month, he pledged the stake to Lehman for three years, though he retains the shares’ voting rights.

Kirch officials were not immediately available to comment.

Kirch controls digital TV venture DF1, which it plans to combine with the Premiere pay-TV business. It also owns Germany’s Sat-1 commercial channel.

Al Waleed also owns stakes in Euro Disney, Apple Computer Inc., Citigroup Inc., News Corp. and Motorola Inc., among other companies.