Discovery Communications Agrees to Buy Scripps Networks -- Update

By Joe Flint and Sarah Rabil Features Dow Jones Newswires

Discovery Communications Inc. has agreed to acquire Scripps Networks Interactive Inc. in a deal valued at about $11.9 billion, combining two powerhouses of nonfiction television programming at a time of major upheaval in the cable-TV business.

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Under the terms of the deal, announced Monday morning, Scripps shareholders will receive $90 a share, $63 of which will be in cash and $27 a share in Class C Common shares of Discovery stock. The price is a 34% premium to its unaffected share price as of July 18, before The Wall Street Journal reported that the companies were in talks.

Including Scripps's debt, the deal is valued at a total of $14.6 billion.

After closing, Scripps' shareholders will own about 20% of Discovery's fully diluted common shares and Discovery shareholders will own approximately 80%.

Discovery, which owns networks including Discovery Channel, Animal Planet and TLC, will expand its portfolio with the addition of Scripps-operated HGTV, Cooking Channel and Food Network.

The tie-up is a bet that bigger is better as the television industry is upended by cord-cutting and the rise of "skinny" online TV bundles from the likes of Hulu, YouTube, Sling TV and others. The thinking is that a broader portfolio of channels that specialize in nonfiction and lifestyle programming like travel, food and nature could appeal to younger viewers and give the combined company a leg up in negotiations with advertisers and programming distributors.

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Write to Joe Flint at joe.flint@wsj.com and Sarah Rabil at Sarah.Rabil@wsj.com

(END) Dow Jones Newswires

July 31, 2017 07:32 ET (11:32 GMT)