News Corp's board okays splitting news and entertainment businesses
27 May 2013
Global media giant, News Corporation, said on Friday that its board has approved the split of its newspaper and entertainment businesses in order to enhance the strategic alignment and increase its operational flexibility.
News Corp, controlled by media baron Rupert Murdoch, said that its board has formally approved the separation of the company into two distinct publicly traded companies, 21st Century Fox and the new News Corporation.
The board has approved the distribution of all shares of the new News Corp to the company's stockholders in a ratio of one share of the new News Corp for every four shares of News Corporation.
The board also authorised a $500-million stock repurchase program for the new News Corp following completion of the separation and write down the value of its Australian and US publishing assets by up to $1.4 billion.
''Today's announcement is a significant step in creating two independent companies with the world's leading portfolios of publishing and media and entertainment assets,'' said Rupert Murdoch, who will be chairman and CEO of the proposed 21st Century Fox, and executive chairman of the new News Corp.
''We continue to believe that the separation will unlock the true value of both companies and their distinct assets, enabling investors to benefit from the separate strategic opportunities resulting from more focused management of each division,'' he added.
New York-based News Corp is one of the world's largest media companies with assets of approximately $77 billion and revenue of nearly $34 billion.
Its operations are spread over the US, Europe, Australia, Asia and Latin America.
21st Century Fox would comprise News Corp's highly-profitable broadcast and worldwide cable networks, leading film and television studios and stations and its pay-TV businesses in Europe and India.
It will include Fox broadcasting, Twentieth Century Fox film and TV, Fox news, sports, business and international channels, Star, The National Geographic channels, BSkyB, Sky Italia and Sky Deutschland, etc.
The new News Corp would cover News Corp's newspapers and information businesses in the US, UK and Australia, book publishing brands, integrated marketing services company and its digital education group among other assets.
It would encompass prominent brands such as Dow Jones, Dow Jones Newswires, The Wall Street Journal, as well as its leading Australian brands The Australian, The Herald Sun, The Daily Telegraph and The Courier Mail.
In addition, the company would include UK's The Times, The Sun, The Sunday Times, and also News Corp's integrated marketing services group and its digital education group, including Wireless Generation.