Televisa-Univision, the new combined company, creates the world leader Spanish media with the largest video library with its own content, as well as an unmatched production capacity to power its major television, digital media and streaming platforms
As the undisputed world leader in the Spanish-language media, Televisa-Univision will have the operational capacity, financial dimensions and audience coverage to accelerate its digital transformation and provide a differentiated broadcast proposal for Spanish speakers 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 in shares in Univision and $ 300 million from other sources
The transaction will be partially funded with a new $ 1 billion investment in Series C preferred shares led by SoftBank Latin America Fund with the participation Google, Raine Group Yes ForgeLight, which highlights the confidence in the ability to Televisa-Univision to take advantage of the opportunity of international streaming in Spanish.
Grupo Televisa, SAB (“Televisa”) and 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 Television will be combined with Univision to create the largest Spanish-language media company in the world: Televisa-Univision ( “Company”).
The combination brings together two top press companies in the two largest Spanish-speaking markets in the world: Univision in United States of America, the highest value of the Spanish-language media market in the world and Television on Mexico, the market with the most Spanish speakers in the world. The resulting company will have the largest video library with long form content in the world, a strong portfolio of intellectual property and international rights to broadcast sports, supported by the most prolific production infrastructure in Romania Spanish. The influence and coverage of these content materials are unmatched. In 2020, Televisa produced over 86,000 hours of content in all genres and categories, including sports and special events, dramas, news, sitcoms, reality, children’s programs, tests and variety shows, comedies, music and cultural events, movies and programs. educational.
Televisa will also contribute the four open signal channels, the 27 pay-TV channels and channels, its Videocine film studio and the subscription service. Blim TV The video on demand (SVOD) and the Televisa brand. These media are the undisputed market leader Mexico.
Company will also benefit from the assets Univision, which are market leaders in the United States and include free Univision and UniMás, nine Spanish-language cable networks, 61 television stations and 58 radio stations in the main Hispanic markets in the United States, and Puerto Rico, and prominent digital assets, including those recently launched TakesTV, its on-demand video streaming service (AVOD) supported by commercials.
The combined entity will have content, production capacity, intellectual property, global coverage and financial resources to dynamically take advantage of relatively new Spanish international streaming opportunities. The Spanish market, which is made up of about 600 million people worldwide and has a total GDP of about $ 7 billion, has a much smaller offer of streaming services compared to other important markets. Less than 10% of Spanish speakers currently use a video product first on the internet (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 reach all Spanish-speaking audiences more efficiently with more of our programming.” He said Emilio Azcarraga, Executive Chairman of the Board of Directors of Televisa. Together, Televisa-Univision can more aggressively pursue 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 this combination offers. ”
“This transformative combination unites the most prominent network serving the Spanish-speaking public in the United States with Mexico’s largest media platform, powered by the world’s most powerful Spanish-language content creator.” He said Wade Davis, CEO at Univision. “Televisa-Univision will emerge as the most important Spanish-language multi-media company in the world, uniquely positioned to take advantage of the great opportunity of the Spanish-speaking market worldwide.”
Added Davis: “The composition of our new group of investors reflects confidence in our strategy, the progress of our digital transformation and the scale of the opportunity that presents itself to us. I would like to thank the Chairman of the Board, Emilio Azcárraga, for his trust in us, so that, as partners, we can continue to promote the growth of the fabulous company that he and his family have developed. I also want to thank you Alfonso de Angoitia Yes Bernardo Gomez, The CEOs of Televisa, for their continued support and collaboration, as we work together to provide our growing audience with access to more compelling, engaging and engaging content in Spanish in the way they prefer. “
“We have been deeply involved in Univision for more than two decades and we have never enjoyed a better relationship with our partners,” said Bernardo Gómez and Alfonso de Angoitia. Executive Co-Chairs of Television. “We are creating a company that is a leader in the multimedia categories, unified in the widest territories and with the scope and concentration to offer the most captivating 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. telecomunications.”
“SoftBank Latin America Fund is proud to invest in the combination of Televisa-Univision to help build a content center that can serve nearly 600 million Spanish speakers globally. With the largest and most emblematic video library of Spanish content in the world and access to the international technological ecosystem SoftBank, we will contribute to transforming the new company into the most important multi-platform digital media company and one of the most important OTT services in the world. . “, He said Marcelo Claure, CEO of SoftBank Group International and member of the board of directors of Univision.
Terms of the transaction
Televisa will continue to take advantage of the company’s considerable growth potential, 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, heaven and other companies, in addition to the main properties associated with production facilities, broadcasting licenses and broadcasting infrastructure in Mexico.
Televisa’s content assets will be contributed in exchange for approximately $ 4.8 billion. Under the terms of the agreement, Univision will pay $ 3 billion in cash, $ 750 million in Univision common shares and $ 750 million in Series B preferred shares, with an annual dividend of 5.5%. The balance is derived from other commercial considerations. The combination will be funded by a $ 1 billion investment in new C-Series preferred shares led by SoftBank Latin American Fund (“SoftBank”), along with ForgeLight LLC, a current Univision investor, in addition to Google and The Raine. Group; and $ 2.1 billion in debt placed by JP Morgan.
The production of news content for Mexico will be outsourced to a company owned by the Azcárraga family to ensure that it remains 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 normal closing conditions, including approval from regulators in the United States and Mexico and 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 lead the combined company; Alfonso de Angoitia will hold the position of executive chairman of the board of directors of Televisa-Univision; and Marcelo Claure, CEO of SoftBank International, will be its vice president. The company’s board of directors will have 13 members: five appointed by Televisa, three by Searchlight and ForgeLight, two by the owners of the C series shares and three independents. When the operation is closed, 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, María 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 the responsibility of Emilio Azcárraga, Executive Chairman of the Board of Televisa, and Bernardo Gómez and Alfonso de Angoitia, Executive Co-Chairs of Televisa, during the transition period to ensure a smooth and successful integration.
Solid financial profile
Due to the Company’s significant capital contribution and higher profitability, Televisa-Univision’s net debt ratio is expected to decrease by more than 2.0x to approximately 5.0x, taking into account the projected synergy of revenue and costs of $ 200 million. at $ 300 million. The differentiated market proposal and the cost structure of Televisa-Univision allow the establishment of prices at the first level with the cost efficiency of the content, because a large part of the production will take place in Mexico, where the Company has large production studios of high quality. in an ideal market for premium content. This creates a strong profitability profile, which is different from all other media companies, by including the projected synergy, the EBITDA margin is expected to be about 45%. The combined financial strength will allow the company to invest in the early launch of its global streaming platform, which is planned for early 2022.
Grupo Televisa after the transaction
Following the transaction, Televisa will continue to develop and expand its telecommunications activities in Mexico, which are leaders in the sector, with the best high-speed internet access and high-quality programming as a content aggregator. Televisa will use the revenue it receives from Univision primarily to reduce debt and will continue to look for growth opportunities and strengthen its leadership position through continued investment in its core business. As a result, Televisa’s net lending rate will fall to less than 2.0x, and its assets and liabilities in US dollars will be equivalent. After closing the transaction, Televisa will no longer consolidate the results of its content segment.