Comcast plans to break itself in two
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Comcast on Monday announced that it would split its company into two publicly traded businesses through a tax-free spinoff of its media and entertainment assets, NBCUniversal and Sky.
Why it matters: It's hoping to create more shareholder value by separating its high-growth technology and connectivity business from its media business.
- Comcast's stock jumped 14% in pre-market trading.
Zoom in: Comcast's current co-CEO Mike Cavanaugh will become CEO of the new media and entertainment company, which will be called NBCUniversal.
- Former Comcast financial chief Michael Angelakis "will become the CEO of the tech and connectivity business, which will remain Comcast.
- Comcast chairman and co-CEO Brian Roberts will be actively involved in the leadership of the new entities "working in partnership with the CEOs of both companies," Comcast said in the statement.
What they're saying: "The proposed separation reflects Comcast's track record of positioning its businesses to compete and win in rapidly changing markets," the company said.
- "As technological innovation, consumer behavior and competitive dynamics continue to reshape both media and communications, Comcast's Board and management team believe each company will be better positioned to pursue its own strategic priorities, invest for growth and create long-term shareholder value as independent entities."
The big picture: The separation underscores the pressure that media companies face to evolve as technology upends the way consumers engage with content.
- In 2018, Comcast outbid Fox to buy Sky in the U.K. for $40 billion to scale its entertainment and media footprint in a bid to compete with tech.
- Earlier this year, Comcast completed the spinoff of NBCUniversal's cable networks into a separate, publicly traded company, Versant Media.
What to watch: Comcast expects to keep a stake of up to 19.9% in NBCUniversal for as long as a year.
