Professional Documents
Culture Documents
Section A- Group 5
Team Members:
Varun Monnier (17A1HP211)
Amrita Adhikari (17A1HP212)
Sunaina Saxena (17A1HP247)
Mayank Gautam (17A1HP248)
Utkarsh Agarwal (17A1HP278)
Anand Subramanian (17A1HP279)
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INTRODUCTION
What is an Acquisition?
An acquisition occurs when one company takes a controlling ownership interest in another firm,
a legal subsidiary of another firm, or selected assets of another firm such as a manufacturing
facility. It may involve the purchase of another firm’s assets or stock, with the acquired firm
continuing to exist as a legally owned subsidiary.
COMPANY OVERVIEW
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Objective of the Acquisition
The strategic rationale of Discovery in acquiring Scripps was to create a scaled up
independent media company.
The ulterior motive for Discovery was to tap into the Sports Network in the Europe
Geography to change perception in minds of the people that Discovery was a leader in
providing educational content via cable television.
The potential for Scripps to grow outside USA will provide top line synergies while the
cost synergies are anticipated to rise to $350 Million annually.
Both the companies together will account for 20% of ad-supported paid TV network in
the USA.
Golden Parachute
Special lucrative compensations packages, usually arranged as lump-sum payments of cash, that
are distributed to a selected group of senior executives if a pre-specified threshold (usually about
26,6%) of outside stock ownership is acquired in a takeover bid. Due to multiple acquisition
offers from Viacom and Discovery, Scripps Network, chalked out a Golden Parachute strategy to
avoid insolvency.
Post acquiring Scripps Network Interactive, Discovery Inc. (renamed post acquisition), Jon
Steinlauf a former Scripps Ad Sales Chief, was announced as the chief US Advertising Officer
for the combined company. The combined company now owns 17 Networks. With 97% of ads
being viewed live- same day, Steinlauf is touting as one of the only options for brands to reach
women, who are watching less live linear TV. The company had already planned its first big
Discovery-Scripps crossover event: Next month, TLC will air a wedding special-“Drew and
Linda Say I Do”—featuring Drew Scott, from HGTV’s Property Brothers. Kathleen Finch, who
oversees 12 networks as chief lifestyle brands officer said, “We’re already working on all kinds
of opportunities between the nets and the talent.”
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“It was the first time that all the nets were strategically pointing to one priority, and it ended up
being No. 1 in cable for Saturday night. So, we do have the power to move the audience when
we’re strategic about it,” said Finch. The acquisition is expected to be accretive to adjusted
earnings per share and to free cash flow in the first year after closing, including significant cost
synergies. The combination is expected to create a strong economic model with capacity for
rapid debt repayment and a clear runway for growth and value creation.
Discovery nearly spent USD 140 million in restructuring post acquisition. This restructuring
involved incorporating Scripps’ senior management in the board of the combined company
Discovery Inc.
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REFERENCES
Acquisition Plan Phases
“Mergers, Acquisitions, and Other Restructuring Activities”-8th Edition, Donald M.
DePamphilis, Ph.D
Company Overview
https://en.wikipedia.org/wiki/Scripps_Networks_Interactive
https://en.wikipedia.org/wiki/Discovery,_Inc.
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