Comcast on Monday unveiled plans to break itself into two publicly traded companies, separating its connectivity operations from its media and entertainment assets in the latest attempt by a legacy media company to adapt to the rapidly changing streaming landscape.
The tax-free spin-off, expected to be completed in about a year, will create one company centred on Comcast's cable, wireless and business services, while the second will house NBCUniversal, Sky, Universal theme parks, its film and television studios, NBC and streaming platform Peacock.
The announcement was welcomed by investors, with Comcast shares surging as much as 23% in premarket trading.
Comcast said the restructuring would allow each business to pursue independent growth strategies as technological change and shifting consumer preferences reshape both the communications and media industries.
"The proposed separation reflects Comcast's track record of positioning its businesses to compete and win in rapidly changing markets," the company said in a statement.
"As technological innovation, consumer behavior and competitive dynamics continue to reshape both media and communications, Comcast's Board and management team believe each company will be better positioned to pursue its own strategic priorities, invest for growth and create long-term shareholder value as independent entities," it added.
Existing Comcast shareholders will receive shares in both companies after the transaction closes. Comcast will retain a stake of up to 19.9% in NBCUniversal for as long as one year after the spin-off, with plans to monetise that holding gradually in a tax-efficient manner.
Brian L. Roberts, Chairman and Co-Chief Executive Officer of Comcast Corporation, described the move as the beginning of a new phase for the company.
"This is a very exciting day for our company. The transaction we are announcing will unlock a more entrepreneurial management approach and open up a multitude of new opportunities for each business. I very much look forward to helping guide our collective growth for this next chapter," Roberts said.
Mike Cavanagh will become chief executive of the newly created NBCUniversal media and entertainment company.
Comcast also announced the return of former chief financial officer Michael Angelakis, who will take over as Comcast's chief executive.
