Despite his tawdry tabloids, Australian Rupert Murdoch has built an envious media empire ranging from a near-monopoly in the Australian print press, to ownership of one of America’s establishment legends and one of the nation’s only three national papers The Wall Street Journal, to the #1 cable news channel Fox News, to a reach the includes numerous websites (myspace.com, ...) and the a movie studio (20th Century Fox).

While Murdoch has established an international presence, besides beaming his channels via Middle East satellite companies; Murdoch has not made any (or, at least, any major) acquisitions or domestic establishments in the Arab world. That may be about to changed.

Murdoch’s own News Corporation-owned Wall Street Journal reported today that News Corporation is in talks to acquire shares in Rotana Media; one of the Middle East’s largest media companies which is owned by Saudi billionaire Prince al-Waleed Bin Talal whom, in turn, as also a shareholder (5.7% of the company) in News Corporation through his Kingdom Holding Co. investment firm and is close, on a business level at least, to the Murdoch family.

Rotana Media consists of several channels (one of which broadcasts shows produced by Fox), a record label (which promotes its artists through then a MTV-esque Rotana channel), and the Arab world’s largest media library that includes rights to over 2,000 Arab films and the region’s largest music collection. Prominent Arab artists with Rotana include Egypt’s Amr Diab and Tunisian Saber el-Rebai.

The deal envisions News Corporation taking a 20% stake in Rotana and giving it access to over 300 million Arab consumers. Rotana is one of the most popular Arab channels and can also be subscribed to in the United States (and, maybe, elsewhere).

America’s Citibank is advising the deal via its Dubai-based office. Prince Bin Talal owns a 5% holding share in Citibank. Spokesperson for Prince Talal, News Corporation and Citibank are declines to comment or where unavailable. A formal bid is expected this month for either new stock or existing shares.

The deal could boost the fortunes of both Murdoch and Bin Talal. The respective News Corporation and Kingdom Holding Co. have, respectively, seen decline profits in mature markets and suffered from the global recession. Murdoch wants to enter new and potentially very lucrative markets and Bin Talal would like very much to secure the financial backing of a prominent investor as his firm has since is equity decline 50% from a last year peak of $19.1 billion to less than $8 billion now.