{alltv} Mexico's Televisa to invest $1.2 billion in rival Univision

Monday, October 4, 2010

{alltv} Mexico's Televisa to invest $1.2 billion in rival Univision

MEXICO CITY (Reuters) – Mexico's Televisa said on Monday it will acquire a 5 percent stake in rival U.S. broadcaster Univision for $1.2 billion, as it takes a bet on the lucrative Hispanic television market in the United States.

Televisa, the world's top Spanish-language broadcaster, also agreed to extend its programing agreement with Univision to 2020 from 2017, with the option of a further extension to 2025, the firm said on its flagship TV news show in Mexico.

"With an investment of $1.2 billion, Grupo Televisa will obtain a 5 percent stake in Univision's capital," Televisa news anchor Joaquin Lopez Doriga said.

Televisa will also take on debt convertible to 30 percent of Univision, and the option to acquire another 5 percent of the company after three years.

U.S. law prohibits a foreign broadcaster from owning more than a quarter of any U.S. broadcaster.

Earlier on Monday, a Mexican radio station reported that Televisa had reached a deal to buy a 35 percent stake in Univision.

Televisa provides Univision with soap operas and other shows.

The two companies went to court last year over a royalty dispute, although they quickly agreed a settlement.

Univision will also be able to use Televisa's programs on the Internet, ending a court fight over Internet rights last year. Televisa was banned from streaming TV programs over the Web in the United States that it had already licensed to Univision.

Privately-held Univision was not immediately available for comment.

Both companies want a bigger slice of the lucrative Hispanic television market in the United States. Hispanics make up about 15 percent of the U.S. population and that could grow to 25 percent by 2050, according to census forecasts.

Televisa's U.S. expansion was long hampered by the legal battle with Univision as the Mexican company tried to get more money from its shows aired in the United States, while the U.S. company tried to keep the programs that generated the bulk of its prime-time ratings.

Televisa's shares closed 0.06 percent lower at 47.73 pesos in Mexico. They are down about 12 percent so far this year.