Televisa was already a big shareholder in Univision and its top programming provider. After the transaction closes, Televisa will have a 45% stake in Televisa-Univision.
Wade Davis, who led a buyout of Univision last year, will lead the combined company, Televisa-Univision with Televisa’s co-chief executive officer Alfonso de Angoitia serving as executive chairman of the board.
Marcelo Laure, CEO of SoftBank International will become vice chairman of the board. Softbank helped finance the translation, leading a $1 billion Series C preferred investment, with participation from Google, The Raine Group and ForgeLight.
Televisa is kicking in $4.8 billion assets worth $4.8 billion. In exchange, It will receive $3 billion in cash, $1.5 billion in Univision equity and $300 million from other sources.
“This transformative combination brings together the leading network serving U.S. Spanish-language audiences with the leading media platform in Mexico powered by the most powerful Spanish-language content engine in the world,” said Davis. “Televisa-Univision will emerge as the leading global Spanish-language multi-media company, uniquely positioned to capture the significant market opportunity for Spanish speakers worldwide.”
“This strategic combination generates significant value for shareholders of both companies and will allow us to more efficiently reach all Spanish-language audiences with more of our programming,” said Emilio Azcárraga, executive chairman of the Televisa Board of Directors. “Together, Televisa-Univision can more aggressively pursue innovation and growth through digital platforms as the industry continues to evolve. Our new investors at the SoftBank Latin America Fund, Google and The Raine Group are just as excited about the opportunities presented by this combination.”
The new company will have a large library of owned content and production capabilities to fuel its TV platforms including the Univision and UniMas broadcast networks, nine cable networks 61 television stations and the new PrendeTV streaming service.
Televisa will also contribute its four free-to-air channels, 27 pay-TV networks channels and stations, its Videocine movie studio and Blim TV subscription video on demand (SVOD) service, and the Televisa trademark.
Televisa will retain ownership of Izzi Telecom, Sky, and other businesses, as well as the main real estate associated with the production facilities, the broadcasting licenses and transmission infrastructure in Mexico.
News content production for Mexico will be outsourced from a company owned by the Azcárraga family to keep the news business in Mexican hands and produced by Mexico. Televisa-Univision will retain assets and library related to Televisa’s news division.
Univision has been hampered by a large debt load. As a result of the transaction, its net debt leverage ratio is expedited to decline to about 5 times earnings, including run-rate revenue and cost synergies of $200 million to $300 million.
The company is expected to have an earnings before interest, taxes, depreciation and amortization margin of 45%.
The transaction is expected to close in 2021, subject to customary closing conditions, including receipt of regulatory approvals in the United States and Mexico, and Televisa shareholder approval. The Board of Directors of both Televisa and Univision have already approved the combination.
“The SoftBank Latin America Fund is proud to invest in the combination of Televisa-Univision to help create a content powerhouse that can serve the nearly 600 million Spanish-language speakers globally. With the largest and most iconic original Spanish content library in the world and access to SoftBank’s global tech ecosystem, we will help transform the new company into the leading Spanish-language multi-platform digital media company and one of the most important OTT service providers in the world,” said Marcelo Claure, CEO of SoftBank Group International and board member of Univision.
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