Mexican and Latin American media powerhouse Televisa is to merge its media, content and production assets with Univision, the leading US Hispanic network in which it already holds a 36% stake.
The combination brings together two leading media businesses in the two largest Spanish-speaking markets in the world: the US, the largest Spanish-language media market by value, and Mexico, which is the most populous Spanish-language market in the world. Televisa-Univision, the new combined company, will have the largest Spanish-language library of owned content, coupled with strong production capabilities.
Televisa will remain the largest shareholder in Televisa-Univision with a stake of approximately 45%. As a part of the agreement, Televisa will retain ownership of izzi Telecom, Sky, and other businesses, as well as the main production facilities, broadcasting licenses and transmission infrastructure in Mexico.
Univision CEO Wade Davis will lead the combined company, Alfonso de Angoitia will serve as executive chairman of the Televisa-Univision board and Marcelo Claure, CEO of SoftBank Group International will become vice chairman.
Televisa will 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.
Univision’s assets in the US include the Univision and UniMás broadcast networks, nine Spanish-language cable networks, 61 television stations and 58 radio stations in major US Hispanic markets and Puerto Rico, and digital assets including its recently launched AVOD streaming service, PrendeTV.
While the Televisa news division will be owned by the new company, ews content production for Mexico will be outsourced from a company owned by The Azcárraga family to guarantee that news content remains in Mexican hands and is produced in Mexico.
The merger is designed to enable the new company to address what it believes is the relatively nascent global Spanish-language streaming market.
The pair said that the Spanish-language market, which represents around 600 million people globally, and an aggregate GDP of about US$7 trillion, is significantly underserved from a streaming perspective relative to other major markets. They cited the stat that fewer than 10% of the Spanish speaking population currently use an OTT video product, compared with the English language market where nearly 70% of the population has at least one streaming service.
Televisa will contribute to the transaction its content assets for a total value of US$4.8 billion, comprised of US$3.0 billion in cash, US$1.5 billion in Univision equity and US$0.3 billion from other sources.
The deal will be partially financed by a new US$1 billion Series C preferred investment led by the SoftBank Latin America Fund with participation from ForgeLight, Google, and The Raine Group.
Post-transaction, Televisa will focus on the development of its telecom assets. The company is a leading cable operator in Mexico.
“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. 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,” said Emilio Azcárraga, executive chairman of Televisa.
“This transformative combination brings together the leading network serving US Spanish-language audiences with the leading media platform in Mexico powered by the most powerful Spanish-language content engine in the world. 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,” said Univision CEO Wade Davis.
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