Univision and Televisa Set Merger to Create Spanish-Language Giant

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Univision and Televisa have come to phrases on a merger settlement, a long-awaited deal that can create a Spanish-language TV big with broad attain in Mexico and the U.S.

The deal requires Televisa to contribute its media, content material and manufacturing property and a handful of networks to a brand new entity to be referred to as Televisa-Univision. Televisa’s property are valued at $4.8 billion. The brand new firm shall be led by Univision CEO Wade Davis, who headed the investor group that acquired Univision in early 2020.

“This transformative mixture brings collectively the main community serving U.S. Spanish-language audiences with the main media platform in Mexico powered by essentially the most highly effective Spanish-language content material engine on the planet,” stated Davis. “Televisa-Univision will emerge because the main world Spanish-language multi-media firm, uniquely positioned to seize the numerous market alternative for Spanish audio system worldwide.”

Televisa would be the largest shareholder in Televisa-Univision with a forty five% stake; at current the corporate owns about 36% of Univision. Univision pays Televisa $3 billion in money, one other $750 million in Univision shares and $750 million in most popular Univision shares that promise an annual dividend of 5.5%. The deal shall be financed by a $1 billion fairness funding from SoftBank Latin American Fund, with participation from Google and Raine Group and $2.1 billion in debt commitments organized by J.P. Morgan. The deal is anticipated to shut later this 12 months.

Alfonso de Angoitia, at current Televisa co-CEO, will function govt chairman of the Televisa-Univision board. Marcelo Claure, CEO of SoftBank Worldwide, will turn out to be vice chairman.

Televisa is without doubt one of the largest producers of content material on the planet. Final 12 months it produced some 86,000 hours leisure, information, sports activities and unscripted reveals. The union with Univision permits the 2 to mix forces to launch a Spanish-language streaming service to serve the U.S., Mexico and the remainder of the Spanish-speaking world.

“We have now been deeply concerned with Univision for greater than 20 years, and we have now by no means loved a greater relationship with our companions,” stated de Angoita and Televisa co-CEO Bernardo Gómez. “We’re creating an organization which is a pacesetter throughout multi-media classes, unified over the biggest territories and with the dimensions and focus to ship essentially the most compelling content material expertise to Spanish-language shoppers around the globe. We’re assured that this strategic transaction will maximize the potential of our Content material section, whereas permitting us to strengthen our steadiness sheet and give attention to development alternatives at our Telecom enterprise.”

Outdoors of the Televisa-Univision umbrella, Televisa will retain possession of izzi Telecom, Sky and different companies and the actual property related to the manufacturing services, the broadcasting licenses and transmission infrastructure in Mexico.

Televisa is such an establishment in Mexico that the deal got here with some obligations by the broadcaster to protect the Mexican operation of its information content material.

“Information content material manufacturing for Mexico shall be outsourced from an organization owned by The Azcárraga household to assure that information content material stays in Mexican palms and is produced in Mexico. Televisa-Univision will retain all property, IP and library associated to Televisa’s Information division,” the press launch said.

Televisa has been an fairness and content material companion of Univision for greater than 40 years. The businesses have mentioned merging on and off previously though the FCC’s overseas possession guidelines forestall an outright takeover of Univision’s TV stations by Televisa.

Univision was offered final 12 months by a gaggle of personal traders led by Haim Saban, to a brand new group of traders headed by Davis’ ForgeLight banner and SearchLight Capital, in a transaction valued at about $8 billion-$9 billion.

Univision as soon as was the undisputed chief of of Spanish-language TV within the U.S. However over the previous decade NBCUniversal-owned Telemundo got here on sturdy with assets for high-profile programming corresponding to World Cup and Olympics rights. Telemundo additionally was early to experiment with U.S.-produced applications for bilingual and U.S.-born Hispanic audiences. Univision, then again, relied for years on the success of novelas produced for the Mexican market by Televisa.

With the merger, Televisa and Univision each anticipate to obtain “environment friendly content material prices” and financial savings that can enable the corporate to ship earnings earlier than curiosity, taxes, depreciation and amortization at a really wholesome 45% margin. A lot of these financial savings come from producing content material in Mexico.

Televisa and Univision and a protracted historical past. The precursor to Univision was based in 1961 as a single TV station in San Antonio, Texas, by Emilio Azcárraga Vidaurreta, grandfather of present Grupo Televisa chief Emilio Azcárraga Jean.

However the relationship has not at all times been clean. The unhealthy blood between each firms culminated in Televisa’s breach of contract lawsuit in opposition to Univision touchdown them each in a Los Angeles court docket in 2009. The battle over royalties ended with each events reaching a settlement simply earlier than then Grupo Televisa chairman Emilio Azcarraga Jean was poised to take the stand.

In 2017, Univision appointed its former head of stories Isaac Lee to turn out to be Chief Content material Officer of each firms and oversee leisure operations.

By July 2018, Lee was gone after one other shake-up at Univision the place TV vet Vincent Sadusky took over the CEO reins from Randy Falco. The corporate started to restructure and unload the English-language digital companies that Lee had championed.

Fighting sector -wide challenges going through their core broadcasting companies, each Univision and Televisa have seen shakeups of their govt ranks. At Univision, Falco introduced his plans to depart in March 2018 simply 4 months after he signed a two-year contract extension. In late 2017, Azcarraga Jean stepped down after 20 years on the helm of the Mexican media empire his grandfather co-founded, though he stays govt chairman of the board. A failed bid for an IPO compelled Univision to reorganize, shedding some 200 staff amid plans to promote a few of its digital property.

The merger is anticipated to higher place each firms in a brand new world dominated by world streaming providers.

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