Televisa, Univision combine to form Spanish-language giant

Merger brings together two brands in two different countries to form one big global Spanish-language powerhouse 

Two of the world’s biggest names in Spanish-language broadcasting are forming a union.

Announced Tuesday night, Mexico’s Grupo Televisa S.A.B. – simply known as Televisa, and privately-held U.S. broadcaster Univision announced a merger agreement bringing together each company’s media assets and content, forming a new company called Televisa-Univision. Historically, Televisa has provided Univision with tons of programming and produced 86,000 hours of it in 2020 alone. The merger would create the world’s biggest Spanish-language company.

The deal marries Mexico’s biggest broadcaster and the U.S. Spanish-language giant in a $4.8 billion transaction. Here’s how the financials would work – the merger would be partly financed by $1 billion of new Series C preferred equity investment from SoftBank’s Latin American Fund, with current Univision investor ForgeLight, Google, and The Raine Group; and $2.1 billion of debt commitments arranged by J.P. Morgan. Univision plans to pay $3 billion for Televisa; $750 million in Univision shares; and another $750 million for Univision preferred shares, promising an equal dividend of 5.5 percent. Televisa plans to have a 45 percent stake in the new Televisa-Univision, up from the current 36 percent in Univision.

“This strategic combination generates significant value for shareholders of both companies and will allow us to more efficiently reach all Spanish-language audiences with more of our programming,” said Emilio Azcárraga, executive chairman of the Televisa board of directors. “Together, Televisa-Univision can more aggressively pursue innovation and growth through digital platforms as the industry continues to evolve. Our new investors at the SoftBank Latin America Fund, Google and The Raine Group are just as excited about the opportunities presented by this combination.”

Univision CEO Wade Davis would retain his title in the new company, while Televisa’s Alfonso de Angoitia becomes executive chairman, and SoftBank’s Marcelo Claure is being named vice chairman. 

Founded in 1955 by the Azcarraga family, Televisa is Mexico’s dominant broadcaster, with four over-the-air networks (Canal 5, FOROtv, Las Estrellas, and Nueve) covering 253 affiliates; 27 cable networks; SVOD service Blim; film studio Videocine; and Izzi telecom (formerly Cablevision.) Televisa was also involved in English-language television as it ran Tijuana-based XETV through a San Diego-based company called Bay City Television, serving the San Diego area when it ran through various stages as an ABC, Fox, CW, and independent station. Bay City closed in 2017 after XETV lost its CW affiliation and became an affiliate of Canal 5. Televisa also owns another cross-broder Tijuana station, XEWT. 

Univision owns 61 local television stations, 58 radio outlets, and broadcast network Unimas. In Chicago, Univision owns WXFT-Ch.60 and WGBO-Ch.66; and radio stations WOJO-FM, WVIV-FM, WPPN-FM, and WRTO-AM. Univision is one of the very few broadcasters left who simultaneously owns numerous TV and radio stations.

The deal is subject to regulatory approval in both countries, given TV and radio licenses are involved. In Mexico, Televisa plans to outsource its news operations to a privately-held company owned by the Azcarraga family; Televisa maintains the broadcast licenses, buildings, Izzi, and transmission infrastructure separate from the new company. 

Meanwhile, the FCC has a rule limiting foreign investment in media properties to 25 percent, as a petition to increase the foreign ownership of iHeartMedia from 25 percent to 100 percent is now in front of the agency. 

The main reason for this union is simple – both companies are banding together to launch a streaming service in the United States and Mexico targeting Spanish-language consumers as viewers in the 18-49 demo are quickly shifting away from linear TV. Another reason is both companies – despite being based in different countries, want to build scale in an increasingly global economy. It’s an issue countries around the world need to face, especially north of the border as streaming is breaking down geographical walls. 

In addition, Televisa and Univision are feeling heat in their respective countries from competitors, who each have scored big-ticket items: TV Azteca’s Azteca 7 in Mexico, who owns rights to Liga MX soccer and NFL football; and NBCUniversal’s Telemundo in the States, who currently has rights to World Cup Soccer and the Olympics and whose fare is already streaming on Peacock. 

While Televisa and Univision has had a working relationship for decades, there has been tension – in 2006, both wound up in court regarding a breach-of-contract suit over programming rights, settled in 2009



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