Shareholders in multimedia News Corporation now have the prospect of being shareholders in two News Corporations, one a “world-class publishing company” and the other “an unmatched global media and entertainment company.”
The company’s board of directors gave the company’s executives the go-ahead to explore the split, which has been widely discussed in recent media reports. It the company goes ahead, it is going to try to complete the process in about a year.
News Corp. said that each separately traded company “…would benefit from enhanced strategic alignment and increased operational flexibility with respect to an unparalleled portfolio of assets, brands and franchises.” It pointed out that each would remain a leader in its field on a global scale.
Chairman and CEO Rupert Murdoch stated, “There is much work to be done, but our Board and I believe that this new corporate structure we are pursuing would accelerate News Corporation’s businesses to grow to new heights, and enable each company and its divisions to recognize their full potential – and unlock even greater long-term shareholder value. News Corporation’s 60-year heritage of developing world-class media brands has resulted in a large and unparalleled portfolio of diversified assets. We recognize that over the years, News Corporation’s broad collection of assets have become increasingly complex. We determined that creating this new structure would simplify operations and greater align strategic priorities, enabling each company to better deliver on our commitments to consumers across the globe. I am 100 percent committed to the future of both the publishing and media and entertainment businesses and, if the Board ultimately approves a separation, I would serve as Chairman of both companies.”
News Corp. listed the benefits it would expect from a split, saying each division would be able to:
* Focus on and pursue distinct strategic priorities and industry-specific opportunities that would maximize their long-term potential.
* Benefit from greater financial and operational flexibility and better position each company to compete.
* Respond and react more quickly to rapidly-evolving technology and global market opportunities.
* Tailor its capital structure, and allocate and deploy resources in a manner consistent with its strategic objectives that best enhances value for its respective shareholder group.