Comcast Corporation has announced “its intention” to separate into two independent publicly traded companies through a tax-free spin-off of NBCUniversal and Sky.
Upon completion of the transaction, Comcast shareholders will own shares in both Comcast and NBCUniversal, creating “two focused industry leaders, each with significant scale, strong financial profiles and distinct strategic opportunities.”
The proposed separation “reflects Comcast’s track record of positioning its businesses to compete and win in rapidly changing markets.”
In a pre-market announcement made on Monday, Comcast explained, lAs technological innovation, consumer behavior and competitive dynamics continue to reshape both media and communications, Comcast’s Board and management team believe each company will be better positioned to pursue its own strategic priorities, invest for growth and create long-term shareholder value as independent entities.”
Brian L. Roberts will continue to be actively involved in the leadership of Comcast and NBCUniversal, working in partnership with the CEOs of both companies.
“This is a very exciting day for our company. The transaction we are announcing will unlock a more entrepreneurial management approach and open up a multitude of new opportunities for each business. I very much look forward to helping guide our collective growth for this next chapter,” Roberts said.
Mike Cavanagh will be the Chief Executive Officer of NBCUniversal and Comcast’s former Chief Financial Officer Michael Angelakis will become the Chief Executive Officer of Comcast, following completion of the separation and in the interim will join as a Strategic Advisor.
Cavanagh said, “”Both companies begin this next chapter from positions of strength. Comcast will continue to build on its leadership in connectivity, while NBCUniversal, together with Sky, will have the scale, brands, content and financial resources to compete as a premier global media and entertainment company. Each organization will continue to be led by a management team with deep industry experience that will benefit from focused strategic priorities and the ability to pursue opportunities most relevant to their businesses. I’m personally thrilled to continue leading NBCUniversal into the future. With our iconic brands and theme parks, leading franchises and incredible creative talent, we are well-positioned for long-term value creation.”
The separation is expected to be completed through a tax-free spin-off to Comcast shareholders in approximately one year, subject to the satisfaction of customary conditions, including final approval by Comcast’s Board of Directors, receipt of tax opinions, regulatory approvals and completion of financing arrangements.
NBCUniversal will have the same dual-class share structure as Comcast. Comcast expects to retain a stake of up to 19.9% ownership position in NBCUniversal for up to one year after the completion of the spin, which it intends to monetize in a tax-efficient manner over time.
“There can be no assurance that the proposed transaction will be completed or, if completed, as to its terms or timing,” Comcast shares.
Advisors
Goldman Sachs & Co. LLC and PJT Partners are serving as financial advisors to Comcast, and Davis Polk & Wardwell LLP is serving as legal counsel.
