The American giant separates its media and telecoms activities to stem the fall in its share price and strengthen the autonomy of its strategic divisions.
The American group Comcast announced on Monday its plan to split into two independent listed companies. This operation aims to separate its media and entertainment activities from its mobile telephony and broadband access activities, in a context of strong stock market pressure and upheavals in the media sector.
Two distinct entities for differentiated strategies
On the one hand, a new media and entertainment company will include the NBC television network, the Universal film studios, its Peacock video-on-demand platform and the British Sky channels. On the other, an entity will bring together its mobile telephony and broadband access activities serving 65 million homes and businesses across the United States.
The operation aims to stem the sharp decline in its share price, which has lost 30% in one year. Its market capitalization, which was around $82.7 billion before the split was announced, is at its lowest level in ten years. The American group hopes that by separating its connectivity activities from its media and entertainment assets, it will strengthen their strategic autonomy and their growth potential.
The split was well received by the market, with the stock expected to be up around 17% at the open on Wall Street.
Brian Roberts, Comcast’s chairman and co-CEO, will continue to be “actively involved” in the leadership of both companies following a shake-up of the management team, Comcast said. Mike Cavanagh, co-chief executive of Comcast, will become chief executive of NBCUniversal, while former Comcast CFO Michael Angelakis will take over as CEO of Comcast.
Following the split announced Monday, which is expected to be finalized within about a year, subject to necessary approvals, Comcast shareholders will own shares of both companies. Comcast plans to retain up to 19.9% of NBCUniversal’s capital for a maximum of one year after the transaction, before gradually selling this stake under tax-optimized conditions.
A changing sector
In January, Comcast had already grouped all of its cable channels (CNBC, MSNBC, USA, Oxygen, etc.) into a separate group called Versant. This decision is part of a context of profound restructuring of the media sector, marked by a wave of mergers and restructuring, notably with the sale of Warner Bros Discovery and increased competition between giants like Disney, Universal and Netflix.
