Discovery Communications has acquired Scripps Networks Interactive for a total transaction value of US$14.6 billion. This is including the assumption of Scripps’ net debt of approximately US$2.7 billion, according to a press statement.
The acquisition was made via a cash-and-stock transaction and is expected to create “significant cost synergies” of an estimate at US$350 million. It is expected to close by early 2018. The move will also see Kenneth W. Lowe, chairman, president and CEO of Scripps Networks Interactive, joining Discovery’s board of directors following the close of the transaction.
This will allow both Discovery and Scripps having around 20% share of ad-supported pay-TV audiences in the U.S. In addition, the combined company will be home to five pay-TV networks for women, accounting for over 20% share of women watching primetime pay-TV in the U.S.
The acquisition also aims to extend Scripps’ brands, programming and talent to a broader international audience through Discovery. Meanwhile, Discovery will leverage on opportunities to strengthen its existing global female networks. This is with select content from Food Network, HGTV and all the Scripps brands.
The combined company looks to deliver 7 billion monthly short-form streams. This will bring together Scripps’ expertise in short-form video creation with Discovery’s investment in Group Nine Media to create a new scale player able to compete for audiences and ad dollars.
Additionally, Scripps Lifestyle Studios will become a key component of Discovery’s content engine, allowing Discovery to leverage more in strategic areas such as data-driven ad sales, endemic advertising, and branded entertainment solutions. Through the acquisition, Discovery aims to add scale, content engine and multiple brand offerings for new digital distribution partners, including mobile, OTT, and direct-to-consumer platforms and offerings.
“We believe that by coming together with Scripps, we will create a stronger, more flexible and more dynamic media company with a global content engine that can be fully optimised and monetised across our combined networks, products and services in every country around the world,” David Zaslav (pictured), president and CEO, Discovery Communications, said.
“This agreement with Discovery presents an unmatched opportunity for Scripps to grow its leading lifestyle brands across the world and on new and emerging channels including short-form, direct-to-consumer and streaming platforms,” Lowe said.