Univision, Televisa accord comes after Justice Dept. OK
MEXICO CITY — Univision and Televisa, the No. 1 Spanish-language webs in the U.S. and Mexico, respectively, declared Televisa’s multibillion-dollar investment in Univision and massively expanded program licensing agreement a done deal on Monday.
The news comes earlier than expected following the formal refinancing of Univision’s debt and approval of the transaction by the U.S. Dept. of Justice.
Deal gives Televisa considerably greater access to the burgeoning Spanish-language market in the U.S. and relieves cash-strapped Univision.
“We are very pleased that we have moved rapidly from our initial announcement to the completion of this transaction,” said Televisa prexy Emilio Azcarraga Jean. The companies had not expected the deal to close until early 2011.Under the pact, Televisa buys a 5% stake in Univision for a net contribution of $1.2 billion in assets, including $130 million in cash. Televisa transfers 50% of its online platform TuTV to Univision for $55 million and assumes debt equal to 30% of Univision’s value including assuming a portion of Univision’s 2015 senior notes.
Furthermore, the companies announced that in addition to extending the U.S. program licensing agreement that gives Univision access to Televisa’s ratings-winning content until at least 2025, they will now enter into a Mexican programming agreement giving Televisa the right to broadcast Univision’s content in Mexico in the same time frame.
Televisa could buy an additional 5% stake in Univision in five years.
Univision CEO Joe Uva said the deal “will significantly enhance Univision’s world-class multiplatform offerings for viewers and clients while considerably strengthening the company’s balance sheet.
“The refinancing of Univision’s debt was completed on terms that exceeded our expectations, reflecting the financial community’s confidence in our business and its future.”
Deal will allow both companies to cash in on the growing Spanish-speaking population Stateside.
According to a survey commissioned by Hispanic ad agency Orci, the 2010 U.S. Census is expected to find the Hispanic population has expanded to 50 million, commanding $1 trillion in buying power.