New York – News Corporation has announced that it intends to pursue the separation of its publishing and media and entertainment businesses into two distinct publicly traded companies. Upon the closing of this transaction, shareholders will hold interests in both newly-formed companies.
The proposed transaction will create a global media and entertainment company, encompassing News Corporation’s broadcast and worldwide cable networks, leading film and television production studios, television stations and highly successful pay-TV businesses in Europe and India.
“We determined that creating this new structure would simplify operations and greater align strategic priorities, enabling each company to better deliver on our commitments to consumers across the globe,” said Rupert Murdoch, Chairman and CEO of News Corporation.
The new global media and entertainment company that may be formed will consist of News Corporation’s highly-profitable cable and television assets, filmed entertainment, and direct satellite broadcasting businesses, including Fox Broadcasting, Twentieth Century Fox Film, Twentieth Century Fox Television, Fox Sports, Fox International Channels, Fox News Channel, Fox Business Network, FX, Star, the National Geographic Channels, Shine Group, Fox Television Stations, BSkyB, Sky Italia and Sky Deutschland, among others.
News Corporation’s Board authorised management to explore this separation after a Board meeting yesterday.
Upon closing of the proposed transaction, News Corporation’s shareholders would receive one share of common stock in the new company for each same class News Corporation share currently held. Following the separation, each company would maintain two classes of common stock: Class A Common and Class B Common Voting Shares.
The separation is expected to be completed in approximately 12 months. Management is developing detailed plans for the Board’s further consideration and final approval. To execute the transaction requires further work on structure, management, governance, and other significant matters. After receiving final approval of the Board of Directors, News Corporation will convene a special shareholder meeting to consider the transaction. This meeting is not expected to take place until the first half of calendar 2013.
In addition to shareholder approval, the completion of the separation will also be subject to receipt of regulatory approvals, opinions from tax counsel and favourable rulings from certain tax jurisdictions regarding the tax-free nature of the transaction to the Company and to its shareholders, further due diligence as appropriate, and the filing and effectiveness of appropriate filings with the US Securities and Exchange Commission.
