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Mergers, Acquisitions, Alliances and Synergies Case Study
Case Title:
Univision: Making the Right Choice?
Publication Year : 2006
Authors: Sweta Chhaochharia, Kumar Satyaki Ray
Industry: Media
Region: US
Case Code: MAA0150K
Teaching Note: Not Available
Structured Assignment: Not Available
OR
Abstract:
On September 27, 2006, the United Nation’s largest Spanish-language broadcaster, Univision Communications Inc. announced a buyout offer by a consortium of investors including Madison Dearborn Partners, Providence Equity Partners, Texas Pacific Group, Thomas H. Lee Partners and media mogul Haim Saban. The deal was priced at $36.25 a share in cash or a total of approximately $13.7b including the assumption of $1.4b in debt. The deal was expected to close in the spring of 2007, subject to regulatory approvals and customary closing conditions. Televisa, the world’s largest Spanish-language broadcaster had also shown its interest in Univision and had placed an offer of $35.75 per share. The Televisa group was backed by Venezuelan media investor Gustavos Cisneros, Bain Capital, Blackstone Group, Carlyle Group, Cascade Investment and Kohlberg Kravis Roberts. Analysts were expecting Televisa as the winner because Televisa was providing Univision’s top programming through a licensing agreement, which generated about 40% of Univision’s revenue. The agreement was expected to go through 2017. Moreover, Televisa had a 12.5% stake in Univision. But the deal turned towards the consortium led by private equity firms and media mogul Haim Saban. The case would explore whether Univision took the decision of a buyout only to raise the value of its share as analysts pointed out, in particular and the increasing trend of merger and acquisition in the media industry in general.
Pedagogical Objectives:
- The Spanish broadcasting industry in America
- To understand the business model and operation of Univision, the largest Spanish-language media company in the United States
- To understand the business model and operation of the private equity companies, the Saban Capital, Madison Dearborn Partners, Providence Equity Partners, Texas Pacific Group, Thomas H. Lee Partners
- To debate and analyse the potential synergies and challenges arising out of the deal.
Keywords : Mergers,Acquisitions,Alliances Case Study;Univision Communications Inc; Televisa; Madison Dearborn Partners; Providence Equity Partners; Texas Pacific Group; Thomas H Lee Partners; Haim Saban; Private equity; Bain Capital; KKR (Kohlberg Kravis Roberts); Spanish broadcasting in America; NBC; ABC; CBS; Leveraged buyout
