Sun. Feb 23rd, 2020

Discovery To Acquire Scripps Networks For $14.6 Billion

Discovery Communications and Scripps Networks Interactive have made it official, unveiling a $14.6 billion deal that will combine the two cable networks companies known mostly for nonscripted and lifestyle content.


Discovery will acquire Scripps in the cash-and-stock deal, which the companies said would bring together two sets of strong brands, including networks popular with women, allow for $350 million in cost savings, provide more international opportunities for Scripps’ business given that Discovery has been a global player longer than Scripps and give the merged firm more upside in digital and direct-to-consumer services.

Scripps operates HGTV, Travel Channel and Food Network, among others, while Discovery’s networks include the likes of Discovery Channel, Animal Planet, TLC and OWN. The companies said they would create “a global leader in real life entertainment” and “accelerate growth across linear, digital and short-form platforms around the world.”


The $90 per-share price tag of the deal, based on Discovery’s Friday closing price, represents a premium of 34 percent to Scripps’ unaffected share price as of Tuesday, July 18, before deal talks were first reported. Discovery is paying $63 per share in cash and $27 per share in stock. Scripps shareholders will end up owning 20 percent of Discovery, which will also take on Scripps’ net debt of approximately $2.7 billion in the deal.


The combination is expected to close by early 2018 and create “significant cost synergies,” the companies said, estimating them at approximately $350 million. The deal is expected to be accretive to Discovery’s adjusted earnings per share and free cash flow in the first year after close, they said.


Viacom had also been pursuing Scripps, but last week bowed out of the bidding process, clearing the way for Discovery, which has long been interested in a deal. In 2013 and early 2014, it had also held talks with Scripps, but the Scripps family at the time didn’t seem ready to sell.
“This is an exciting new chapter for Discovery,” said David Zaslav, president and CEO of Discovery Communications. “Scripps is one of the best-run media companies in the world with terrific assets, strong brands and popular talent and formats. Our business is about great storytelling, authentic characters and passionate super fans. 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 optimized and monetized across our combined networks, products and services in every country around the world.”


“Through the passion and dedication of our incredible employees, and with the support of the Scripps family, we have built a lifestyle content company that touches the lives of consumers every single day,” said Kenneth Lowe, chairman, president and CEO of Scripps. “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.”

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Written By: Tommy Lightfoot Garrett

Photographs are Courtesy: Discovery

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