Televisa-Univision, the new combined company, creates the world’s leading Spanish media with the largest video library of its own content, as well as unparalleled production capacity to power 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 the digital transformation and provide a differentiated streaming proposal for Spanish speakers who lack sufficient services
Televisa 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 funded in part with a new $ 1 billion investment in C Series preferred stock led by SoftBank Latin America Fund with the participation of Google The Raine Group Y ForgeLight, which emphasizes confidence in the ability to Televisa-Univision to take advantage of the international streaming option in Spanish.
Grupo Televisa, SAB (“Televisa”), and Univision Holdings, Inc. (together with its wholly owned subsidiary, Univision Communications Inc., “Univision”), today announced a definitive agreement defining the content and media assets of Televisa is combined with Univision to create the largest Spanish-speaking media company in the world: Televisa-Univision (the “Company”
The combination brings together two leading media companies in the two largest Spanish-speaking markets in the world: Univision in USA, the world’s most valuable Spanish-language media market, and Televisa On Mexico, the market with the most Spanish speakers in the world. The resulting company will have the world’s most comprehensive long-content video library, a strong portfolio of intellectual property and international rights to the transfer of sport-, backed by the most productive manufacturing infrastructure in españolThe influence and reach of these content items are unparalleled. In 2020, Televisa produced more than 86,000 hours of content across all genres and categories, including sports and special events, dramas, newscasts, sitcoms, reality, children’s, quiz and variety shows, comedies, musical and cultural events, films and educational programs.
Televisa will also contribute its four open signal channels, its 27 pay-TV channels and stations, its Videocine film studio and subscription service. Blim TV From video on request (SVOD) and the Televisa brand. These media are the undisputed market leader in Mexico.
Company will also benefit from the assets of Univision, which are leaders in the US market and the free-to-air networks Univision and UniMás, nine Spanish-language cable networks, 61 television stations and 58 radio stations in the main Spanish markets in the United States and Puerto Rico, and prominent digital assets, including the recently launched TakesTV, the ad-supported video-on-demand streaming service (AVOD).
The combined entity will have the content, production capacity, intellectual property, global reach and financial resources to dynamically take advantage of the relatively new international Spanish streaming capabilities. The Spanish market, which consists of about 600 million people in the world and has a total GDP of about $ 7 billion, has a much smaller range of streaming services compared to other major markets. Less than 10% of Spanish speakers are currently the first to use a video product on the Internet (over the top or OTT), while in the UK market nearly 70% of the population has at least one streaming service.
“This strategic combination generates significant value for the shareholders of both companies and allows us to more efficiently reach all Spanish-speaking audiences with more of our programming”, He said Emilio Azcarraga, Executive Chairman of the Board 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 Hispanic audiences in the United States with the leading media platform in Mexico, powered by the most powerful Spanish-language content creator in the world.” He said Wade Davis, CEO of Univision. “Televisa-Univision will emerge as the world’s leading Spanish-language multimedia company, uniquely positioned to take advantage of the great opportunities of the Spanish-speaking market 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 opportunities ahead. I would like to thank the Chairman of the Board, Emilio Azcárraga, for putting his trust in us so that as partners we can further promote the growth of the fantastic company he and his family have developed. I also want to say thank you Alfonso de Angoitia Y Bernardo Gomez, the CEOs of Televisa, for their continued support and collaboration as we work together to provide our ever-growing audience with access to even more compelling, engaging and engaging content in Spanish, in the way they choose. “
“We have been deeply involved with Univision for more than two decades and have never had a better relationship with our partners,” said Bernardo Gómez and Alfonso de Angoitia, Executive Co-Chairs from Televisa. “We are creating a company that is at the forefront of the multimedia categories, united in the broadest areas and with the scale and focus to deliver 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 at the same time strengthening our balance sheet and focusing on growth opportunities in our business from telecommunications.
SoftBank Latin America Fund is proud to invest in the combination of Televisa-Univision to help build a content powerhouse that can serve nearly 600 million Spanish speakers worldwide. With the most comprehensive and emblematic video library of Spanish content in the world and access to SoftBank’s international technology ecosystem, we will help transform the new company into the leading 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 Univision board.
Terms of the transaction
Televisa will continue to benefit from the Company’s significant growth potential as it will remain the largest shareholder of Televisa-Univision with approximately 45% stake. As part of the agreement, Televisa will continue to own izzi Telecom Sky and other businesses, in addition to major properties related to manufacturing facilities, broadcast licenses and broadcast infrastructure Mexico.
Televisa’s content assets will be contributed in return for approximately $ 4.8 billion. Under the terms of the agreement, Univision will pay $ 3 billion in cash, $ 750 million in Univision common stock and $ 750 million in Series B preferred stock, 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 Series C preferred stock led by SoftBank Latin American Fund (“ SoftBank ”), along with ForgeLight LLC, a current investor in Univision, in addition to the participation of Google and The Raine Group; and $ 2.1 billion in debt obligations posted by JP Morgan.
News content production for Mexico is outsourced to a company owned by the Azcárraga family to ensure that it remains Mexican owned and produced in Mexico. Televisa-Univision retains all assets, intellectual property and video library related to Televisa’s News division.
The transaction is expected to be completed in 2021, subject to customary closing conditions, including regulatory approvals in the United States and Mexico, and Televisa’s shareholders. Televisa’s and Univision’s boards of directors have already approved the combination.
Management and board of directors
Wade Davis, CEO of Univision, will lead the combined company; Alfonso de Angoitia will serve as executive chairman of the board of Televisa-Univision; and Marcelo Claure, CEO of SoftBank International, becomes the 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 Series C shares and three independent. When the operation is completed, the board will consist 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 activities in Mexico will remain 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
As a result of the significant capital injection and higher profitability of the company, Televisa-Univision’s net debt ratio is expected to decrease by more than 2.0x to approximately 5.0x, taking into account the expected synergies of revenues and costs of $ 200 million. up to $ 300 million. Televisa-Univision’s differentiated market proposition and cost structure makes it possible to set prices at the first level with content cost efficiency as much of the production will take place in Mexico where the company has large quality production studios . in an ideal market for premium content. This creates a strong profitability profile that differs from all other media companies, by including the expected synergies the EBITDA margin is expected to be around 45%. The combined financial strength allows the company to invest in the anticipated launch of its global streaming platform, scheduled 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 leading in the industry, with the best high-speed Internet access and high-quality programming as a content aggregator. Televisa will mainly use the revenues it receives from Univision to reduce debt and will continue to look for growth opportunities and strengthen its leadership position through continued investment in its core businesses. As a result, Televisa’s net financing rate will fall to less than 2.0x and its assets and liabilities in US dollars will be the same. After the closing of the transaction, Televisa will stop consolidating the results of its Content segment.