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News Corp to split empire into two distinct publicly traded companies

By afaqs! news bureau , afaqs!, Mumbai | In Media Publishing | July 02, 2012
With this move, News Corporation's publishing business will be separated from its media and entertainment business. The separation will, in turn, permit the media conglomerate's shareholders to hold interests in a publishing company, consisting of publishing assets and a new digital education group, along with a global media and entertainment company.

In an attempt to increase operational flexibility, Rupert Murdoch's global media empire is moving ahead to get divided into two distinct publicly traded companies.

Newscorp

Rupert Murdoch

With this move, News Corporation's publishing business will be separated from its media and entertainment business. The separation will, in turn, permit the media conglomerate's shareholders to hold interests in a publishing company, consisting of publishing assets and a new digital education group, along with a global media and entertainment company.

For the record, News Corporation's board authorised the management to explore this separation after a meeting.

Upon closing of the proposed transaction, Rupert Murdoch will serve as chairman of both the companies and CEO of the media and entertainment division. Meanwhile, Chase Carey will serve as president and COO of the media and entertainment arm.

The separation is expected to be completed in approximately 12 months. The management is in the process of developing detailed plans for the board's further consideration and final approval. Execution of 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 2013.

Rupert Murdoch, chairman and CEO of News Corporation, says in an official statement, "There is much work to be done, but our board and I believe that this new corporate structure will accelerate News Corporation's businesses to grow to new heights, enable each company and its divisions to recognize their full potential and unlock even greater long term shareholder value."

The proposed transaction is expected to create global category leaders in both publishing and entertainment: a publishing company, comprising News Corporation's newspapers and information businesses in the US, UK and Australia, the company's leading book publishing brands, its integrated marketing services company, its digital education group, as well as its other assets in Australia; and a global media and entertainment company, which would encompass News Corporation's broadcast and worldwide cable networks, film and television production studios, television stations and pay-TV businesses in Europe and India.

The new global media and entertainment company 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.

The publishing company includes brands like Dow Jones, The Wall Street Journal, Dow Jones Newswires, Harper Collins, The New York Post, and The Daily, as well as offer the rich diversity of assets in Australia, including leading brands such as The Australian, The Herald Sun, The Daily Telegraph and The Courier Mail.

The company would also include The Times, The Sun, The Sunday Times as well as News Corporation's integrated marketing services group and its ground-breaking digital education group, including Wireless Generation.

Upon closing of the proposed transaction, News Corporation's shareholders will receive one share of common stock in the new company for each same class News Corporation share currently held. Following the separation, each company will maintain two classes of common stock: Class A Common and Class B Common Voting Shares.

In addition to shareholder approval, the completion of the separation will also be subject to receipt of regulatory approvals.

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