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2017-07-31 10:06:02
Discovery to Buy Scripps, Owner of Food Network, in $11.9 Billion Deal

NEW YORK — Discovery Communications announced on Monday an $11.9 billion deal to buy Scripps Networks Interactive, the owner of Food Network and HGTV.

The combined company would control about 20 percent of the advertising-supported pay-television audience in the United States, and it could create a force in television popular with female viewers, bringing together the Scripps channels and Discovery offerings including Investigation Discovery, OWN and TLC.

The talks took place amid broad consolidation in the telecommunications and media industries. Over the past several years, cable and broadband providers including Comcast, Charter, Verizon and AT&T have steadily increased their market presence. That has put pressure on TV companies like Discovery to grow in size as a way to gain leverage in negotiations with cable distributors.

The deal announced on Monday had been in the works for a long time. The companies held talks to combine several times — most recently in 2014 — although those discussions fell apart over a range of issues, including price. In pursuing Scripps, Discovery also faced competition from its rival Viacom.

“We believe that by coming together with Scripps, we will create a stronger, more flexible and more dynamic media company,” David M. Zaslav, chief executive of Discovery Communications, said in a statement.

The deal is valued at about $90 a share, or roughly 34 percent more than the price of Scripps stock before reports emerged about a potential sale. The transaction — made up of $63 a share in cash and $27 a share in Discovery common stock — includes the assumption of $2.7 billion of Scripps’s net debt. The companies say they expect the transaction to close early next year, subject to shareholder and regulator approval.

For Discovery, sealing the deal meant placating the Scripps family’s shareholders, who control roughly 92 percent of the broadcaster’s voting stock and who vote as a group.

“Through the passion and dedication of our incredible employees, and with the support of the Scripps family, we have built a lifestyle content company that touches the lives of consumers every single day,” said Kenneth W. Lowe, chief executive of Scripps Networks Interactive.