Televisa headquarters in Mexico City, in a file photo.
A new giant of Spanish-language television is born.
The companies Televisa and Univision announced their merger on Tuesday to become the main content producer in the Spanish-speaking world.
The decision of two leading companies comes after years of cession of land due to the growth of digital platforms, mainly Netflix, which in the next five years will reach 48 million subscriptions in Latin America.
The new actor, called Televisa-Univision, bursts in precisely with the intention of growing in the
streaming
market
for 600 million people, 190 million in North America.
The marriage, which was repeatedly denied at the end of March by both companies, will launch a catalog of digital content nurtured by both and which will be available at the beginning of 2022. Televisa will put on the table the content broadcast on its 31 channels (four on open TV and 27 pay);
a film studio and its
streaming
platform
Blim.
All this produced last year more than 86,000 hours of content from sporting events, soap operas, newscasts, dramatic comedies.
Univision, leader in the Hispanic market in the United States and Puerto Rico, contributes the material of its two flagship signals and that of nine other cable channels;
61 television stations and 58 radio stations.
It has also just launched a digital on-demand service, Prende TV.
In a joint statement signed in New York, Miami and Mexico City, the companies indicate that Televisa, with a total value of 4.8 billion dollars, will remain the majority shareholder after the merger with a 45% stake.
The company will retain ownership of Sky and IZZI, its telecommunications arms that allow it to compete with Carlos Slim's América Móvil.
Univision, for its part, will pay $ 3 billion in cash and another $ 1,500 in combined shares that Televisa will use to reduce its debt.
The announcement has shot up the share price of Televisa, owned by the Mexican Azcárraga family for decades, by more than 8%.
The merger must be approved by the regulatory entities of Mexico and the United States, although shareholders trust that the operation will culminate this year.
The operation is also fueled by a $ 1 billion investment in shares purchased by SoftBank and current Univision investor ForgeLight LLC.
The transaction also includes the participation of the technology giant Google and The Raine Group.
More than $ 2.1 billion of debt commitments will be coordinated by JP Morgan bank.
Emilio Azcárraga Jean, the executive president of Televisa, has said that the union "will make it possible to more efficiently reach all Spanish-speaking audiences" with joint content.
The businessman believes that the new company will seek the digital market "more aggressively".
This is "significantly neglected," the statement said.
Only 10% of the Hispanic population is subscribed to an on-demand content platform when the number of subscribers in the Anglo-Saxon market is 70%.
Wade Davis, the CEO of Univision, will lead the combined company that will add to Azcárraga's right-hand man, Alfonso de Angoitia, in the role of chairman of the board of directors.
The vice president will be Marcelo Claure, CEO of SoftBank International.
Television and Univision have a long history, almost 20 years, working together.
In 2017 they strengthened their relationships amid the rapid transformation of the industry after the irruption of Netflix in Spanish-speaking countries.
That year, the Mexican regulator approved raising the common shares between the two to 49%.
Univision became the main producer of many of Televisa's content, suffering from a sharp drop in advertising revenue and a 55% decline in its market value.
In February 2020, before the arrival of Wade Davis to Univisión and a series of changes in its structure after the arrival of the Searchlight and ForgeLight funds, Televisa redoubled its collaboration commitment to make programs that were distributed in 70 countries.
Now both have in front of them a revolution of the screens that will not stop.
The
streaming
accounts for 70% of traffic network with more than 850 million households subscribing to various services.
At a rate of premieres of almost 550 series a year, the colossal business has revitalized the world of entertainment.
The news in Mexican hands
The agreement reached between Televisa and Univision has an exception for news production.
Televisión-Univision will subcontract to an Azcárraga family company to "ensure that news content remains in Mexican hands and is produced in Mexico."
The North American country will also be the place of production of most of the giant's content, a strategy to reduce costs that makes it possible to take advantage of the various infrastructure that Televisa has to make series, movies and sports shows.
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