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GrupoTelevisa (TV) stock popped in the recent trading session; find out why

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GrupoTelevisa S.A.B. (TV) stock was rising 21.54% to trade at $12.30 in the current market at the time of writing. TV stock closed the previous session at $10.12. The TV stock volume traded 23.45 million shares, which was higher than the average daily volume of 1.9 million shares within the past 50 days. In the past week, the TV stock had moved up by 5.97%. In the past 12 months rose by 82.34%. Over the past three months, the stock has gained 10.96%, while over the past six months, it has added 39.78%. Further, the company has a current market of $5.79 billion and its outstanding shares stood at 537.00 million.

The four operational segments of GrupoTelevisa

GrupoTelevisa, S.A.B. is a media company that operates for the Spanish media and is based in Mexico City, Mexico. Grupo is considered Mexico’s largest broadcaster. TV stock has its operation in four segments.

Cable segment deals with the operation of multi-system for cable and telecommunication facilities. The business model of this segment is around basic and premium television subscriptions, pay-per-view, ad-revenue generation, internet subscription, installation, and telephonic services.

Sky segment deals with the satellite broadcasting television services that directly broadcast to home. This service also includes installation, ad-sales, and rental services to subscribers in the Dominican Republic, Central America and Mexico.

Content segment deals with the production of TV programs and broadcasting certain channels, timed program-based advertisement sales, licensing provision and internet services.

Other Businesses segment deals with sports and show businesses as well as their promotion. This segment includes specifically soccer, gaming, feature film production and publishing distribution services.

The recent news about content merging between Univision and Televisa

On 25th March, GrupoTelevisa mentioned in an announcement that it is considering a merge of contents and is in talks with Univision. Univision is considered in the US as the largest Spanish-language broadcaster. The meetings with both companies are happening in order to discuss going forward with a business combination of specific content assets.

On 14th April 2021, GrupoTelevisa confirmed that it is combining content with Univision. The aim is to create a new Spanish-language media company that will be a platform for global-scale streaming. The new combined company will be known as Televisa Univision and will operate contents from both prior companies.

Prior to this news, Televisa mentioned in the statement that it is not discussing any sort of merger with Univision Communications Inc, saying that both companies have partnered in the past years to work together on several projects. One aspect of this partnership is through the distribution of exclusive content by Televisa to Univision including Telenovelaswhich are signature Spanish soap operas.

Financial details of this merger

The transaction for the merger of content will be financed partially by a $1 billion Series C preferred investment which will be managed by SoftBank Latin American Fund. ForgeLight, Google and The Raine Group will participate in the financing.

Televisa Univision will have Televisa as the single largest shareholder and will distribute content asset valued at $4.8 billion to the new company. Univision will pay $3.0 billion in cash while it will provide $750 million in Series B preferred equity and another $750 million in Univision common equity. The annual dividend would be 5.5%.

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