News Corp approves split into two firms June 28
Rupert Murdoch. AP
NEW YORK — News Corp said Friday its board approved the breakup of the media-entertainment conglomerate headed by Rupert Murdoch into two separate companies, to be effective June 28.
Murdoch will head both firms, including one company focused on news and publishing, to retain the News Corp name, and another on television and film, to be called 21st Century Fox.
The split spins off the struggling publishing operations which have been hit by the slump in the newspaper industry from the more profitable entertainment assets.
“Today’s announcement is a significant step in creating two independent companies with the world’s leading portfolios of publishing and media and entertainment assets,” said Murdoch, who will be chairman and chief executive of 21st Century Fox, and executive chairman of the new News Corporation.
“We continue to believe that the separation will unlock the true value of both companies and their distinct assets, enabling investors to benefit from the separate strategic opportunities resulting from more focused management of each division.”
The company announced the restructuring last June, a move partly seen as a nod to shareholders angered by the reputational damage and costs inflicted by a phone hacking scandal in Britain, and partly because of troubles within the group’s publishing arm.
The new News Corporation will include newspapers in Britain, Australia and the United States, including The Wall Street Journal and The Times of London. It also includes digital real estate services, book publishing, digital education and sports programming and pay-TV distribution in Australia.
The 21st Century Fox unit includes the Fox studios in Hollywood and a global array of cable and broadcasting networks and properties, including Fox broadcasting and cable operations, National Geographic Channels, Fox Pan American Sports, MundoFox, STAR, and 28 local television station. It has pay-TV services in Europe and Asia, including Sky Deutschland, Sky Italia and its equity interests in BSkyB and Tata Sky.
The board approved the distribution of one share of the new News Corporation for every four shares of the existing company.
The board also authorized a $500 million stock repurchase program for the new News Corporation following the separation.
The company said in March the newspaper and publishing will begin operations with $2.6 billion in cash and that it was looking at “possible acquisitions and dispositions of certain businesses.”
In December, Murdoch named close confidante Robert Thomson, an Australian, as the new boss of the newspaper and publishing empire.
