Discovery Holding Co. and Advance/Newhouse Communications said late Wednesday they have reached an agreement to combine their interests in Discovery Communications Inc., making the group of networks a truly public separate company.
Discovery Holding will contribute its 66.7% interest in Discovery Communications and Advance/Newhouse will kick in its 33.3% interest in DCI into a newly publicly traded company, to be named Discovery Communications Inc. DCI’s current management team will fill all management positions at the new parent company.
Former Discovery CEO and current board member John Hendricks will be named chairman of the new company and current Discovery CEO David Zaslav will retain that role in the new entity. The transaction is expected to close in the third quarter.
DHC and Advance/Newhouse announced in December its intention to combine their interests in DCI.
According to the parties, the transaction will involve three steps:
- DHC will spin off to its stockholders a wholly-owned subsidiary holding the networks and creative services business of Ascent Media Group;
- Immediately following the spin-off of AMG, DHV will combine with a subsidiary of the new publicly traded entity and existing DHC stockholders will receive shares of the new company;
- As part of the same plan, Advance/Newhouse will contribute its interests Discovery Communications and Animal Planet to the new company in exchange for preferred stock that will be immediately convertible upon the close of the transaction into shares representing one-third of the outstanding shares of the new company.
Advance/Newhouse also will receive the right to elect three members of the new company’s board of directors and has approval rights regarding specified actions of the new company and its subsidiaries.