Televisa-Univision, The new combined company, creates the world leader of media in Spanish with the largest video library of its own content, as well as unparalleled production capacity to boost its major television, digital media and streaming platforms
As the undisputed world leader in Spanish-language media, Televisa-Univision will have the operational capacity, financial dimensions and audience reach to accelerate its digital transformation and offer a differentiated streaming proposal for Spanish speakers, those who have insufficient services
Television will contribute its content assets, with a total value of $ 4.8 billion, consisting of $ 3 billion in cash, $ 1.5 billion shares in Univision and $ 300 million from other sources
The transaction will be funded in part by a new $ 1 billion investment in Series C preferred shares led by SoftBank Fund Latin America with the participation of Google, The Raine group i ForgeLight, Which highlights confidence in the ability to Televisa-Univision to take advantage of the opportunity to stream in Spanish internationally.
Grup Televisa, SAB (“Television”), i Univision Holdings, Inc. (Together with its wholly owned subsidiary, Univision Communications Inc., “Univision”), announced today a final agreement in which the content and media assets of Univision Television will be combined with Univision to create the largest Spanish-language media company in the world: Televisa-Univision (the “Company”).
The combination unites two prominent media companies in the two largest Spanish-speaking markets in the world: Univision in United States, The most valuable Spanish – speaking media market in the world, and Television a Mexico, The market with the most Spanish speakers in the world. The resulting company will have the largest video library of long format content in the world, a solid portfolio of intellectual property and international rights to the transmission of sports, Supported by the most prolific production infrastructure in Spanish. The influence and scope of these content assets are second to none. In 2020, Televisa produced more than 86,000 hours of content in all genres and categories, including sports and special events, dramas, news, sitcoms, reality shows, children’s, contest and variety shows, comedies, musical and cultural events. , films and educational programming.
Televisa will also provide its four open signal channels, its 27 pay-TV channels and stations, its Videocine film studio and subscription service. Blim TV of video on demand (SVOD) and the Televisa brand. These media constitute the undisputed market leader in Mexico.
the Company will also benefit from the assets of Univision, Which are market leaders in the United States and include Univision and open signal channels UniMás, Nine Spanish-language cable channels, 61 television stations and 58 radio stations in major Hispanic markets in the United States and port Ric, And prominent digital assets, including the recently launched one TakesTV, Its video on demand streaming service with advertising (AVOD).
The combined entity will have the content, production capacity, intellectual property, global reach and financial resources to dynamically take advantage of the opportunities for streaming in Spanish at an international level, which is relatively new. The Spanish market, which consists of approximately 600 million people in the world and has a total GDP of approximately $ 7 billion, has a much smaller offer of streaming services compared to other major markets. Less than 10% of Spanish speakers currently use a video product on the internet first (over the top or OTT), while in the English market, almost 70% of the population has at least one streaming service.
“This strategic combination generates significant value for the shareholders of both companies and will allow us to more efficiently reach all Spanish-speaking audiences with more of our programming,” he said Emilio Azcárraga, Executive Chairman of the Board of Directors of Televisa. “Together, Televisa-Univision can more aggressively seek innovation and growth through digital platforms as the industry continues to evolve. Our new investors Softbank Latin America Fund, Google and The Raine Group are equally excited about the opportunities presented by this combination. “
“This transformative combination unites the most prominent chain in the service of Spanish-speaking audiences in the United States with the main media platform in Mexico, powered by the most powerful creator of Spanish content in the world,” he said Wade Davis, CEO of Univision. “Televisa-Univision will emerge as the leading company in the world of multiple media in Spanish, with a unique position to take advantage of the great market opportunity for Spanish speakers around the world.”
Added Davis: “The composition of our new group of investors reflects confidence in our strategy, the progress of our digital transformation and the magnitude of the opportunity before us. I would like to thank the Chairman of the Board, Emilio Azcárraga, for his trust in us to, as partners, continue to foster the growth of the fabulous company he and his family have developed in. I would also like to thank Alfonso de Angoitia i Bernardo Gómez, The executive presidents of Televisa, for their continued support and collaboration as we work together to offer our audience ever-increasing access to even more impactful, captivating and interesting content in Spanish, the way they prefer “.
“We have been deeply involved with Univision for over two decades and have never enjoyed a better relationship with our partners,” said Bernardo Gómez and Alfonso de Angoitia, Executive Co-Presidents of Television. “We are creating a company that is a leader in the multimedia categories, unified across the broadest territories and with the scale and focus to provide the most engaging content experience to Spanish-speaking consumers around the world. We are confident that this strategic transaction will maximize the potential of our content segment, while allowing us to strengthen our balance sheet and focus on growth opportunities in our business. telecommunications.”
“SoftBank Fund Latin America is proud to invest in the combination of Televisa-Univision to help create a power of content that can provide services to almost 600 million Spanish speakers worldwide. With the world’s largest and most iconic Spanish-language video library and access to SoftBank’s international technology ecosystem, we will help transform the new company into the leading digital media company on multiple platforms and one of the most important OTT services in the world. world, ”he said Marcelo Claure, CEO of SoftBank Group International and member of the board of Univision.
Terms of the transaction
Televisa will continue to take advantage of the potential for considerable growth of the Company as it will continue to be the largest shareholder of Televisa-Univision, with a stake of approximately 45%. As part of the agreement, Televisa will continue to own Izzi Telecom, Cel and other companies, in addition to the main properties associated with production facilities, broadcasting licenses and transmission infrastructure in Mexico.
Televisa’s content assets will be provided in exchange for approximately $ 4.8 billion. Under the terms of the deal, Univision will pay $ 3 billion in cash, $ 750 million in common Univision shares and $ 750 million in Series B preferred shares, with an annual dividend of 5.5%. The balance is derived from other commercial consideration. The combination will be funded through a $ 1 billion investment in new Series C preferred shares led by SoftBank Latin American Fund (“SoftBank”), along with ForgeLight LLC, the current investor in Univision, in addition to the stake from Google and The Raine Group; and $ 2.1 billion in debt obligations placed by JP Morgan.
The production of the news content for Mexico will be subcontracted from a company owned by the Azcárraga family to ensure that it continues in Mexican hands and is produced in Mexico. Televisa-Univision will retain all assets, intellectual property and video library related to Televisa’s News division.
The operation is expected to be completed in 2021, subject to the usual closing conditions, which includes receiving approval from regulatory bodies in the United States and Mexico, and from Televisa shareholders. The board of directors of Televisa and Univision have already approved the combination.
Management and board of directors
Wade Davis, CEO of Univision, will head the combined company; Alfonso de Angoitia will serve as executive chairman of the board of directors of Televisa-Univision; and Marcelo Claure, CEO of SoftBank International, will be its vice president. The Board of Directors of the Company will have 13 members: five appointed by Televisa, three by Searchlight and ForgeLight, two by the owners of the Series C shares and three independent. When the operation closes, the board will be composed of Emilio Fernando Azcárraga Jean, Bernardo Gómez Martínez, Alfonso de Angoitia Noriega, Marcelo Claure, Michel Combes, Gisel Ruiz, Oscar Muñoz, Maria Cristina “MC” González Noguera, Wade Davis, Eric Zinterhofer, Jeff Sine and two additional members appointed by Televisa.
Following the transaction, content production and operations in Mexico will continue to be led by Emilio Azcárraga, Executive Chairman of the Board of Directors of Televisa, and Bernardo Gómez and Alfonso de Angoitia, Executive Co-Chairs of Televisa, during the period. transition to ensure smooth and successful integration.
Solid financial profile
As a result of the Company’s considerable capital contribution and higher profitability, Televisa-Univision’s net debt ratio is expected to decrease by more than 2.0x and approximately 5.0x, which takes into account the projected revenue synergy. and costs $ 200 million to $ 300 million. The differentiated market proposal and the cost structure of Televisa-Univision allow to fix prices of first level with the efficiency of the cost of content, since big part of the production will take place in Mexico, where the Company has big studies High quality production in an ideal market for premium content. This creates a solid profitability profile that is different from that of all other media companies, by including the projected synergy, the EBITDA margin is expected to be approximately 45%. The combined financial strength will allow the Company to invest in the anticipated launch of its global streaming platform, which is scheduled for early 2022
Televisa Group after the transaction
Following the transaction, Televisa will continue the development and expansion of its telecommunications activities in Mexico, which are leaders in the sector, with the best high-speed internet access and high-quality programming as an aggregator of content. Televisa will use the revenue it receives from Univision primarily to reduce debt and will continue to seek growth opportunities and strengthen its leadership position through continuous investments in its core business. As a result, Televisa’s net debt ratio will decrease to less than 2.0x and its assets and liabilities in US dollars will be equivalent. Following the closure of the operation, Televisa will no longer consolidate the results of its content segment.