Discovery gets DoJ approval for Scripps deal

Discovery Communications’ US$14.6 billion (€12.4 billion) acquisition of fellow US-based cable group, Scripps Networks Interactive, has been cleared by the US Department of Justice (DoJ).

David Zaslav

Commenting on the DoJ’s decision to close its investigation, Discovery president and CEO David Zaslav said it was a “significant regulatory milestone” and an “integral step toward closing our transaction”.

“We look forward to combining these two great companies to the benefit of our enthusiast audiences around the world,” he said.

The news comes just weeks after the European Commission cleared the deal, with the completion of a review in Ireland and other customary closing conditions now only needed before the deal can be completed.

Discovery said it expects the Scripps takeover to close by the end of this quarter. The cash-and-stock transaction was agreed last July and won shareholder approval in November.

The DoJ’s decision came as Discovery reported its fourth quarter and full year 2017 results.

Q4 revenues increased 11% year-on-year to US$1.86 billion due to 13% growth at International Networks, 10% growth at US Networks and “slight growth” at Discovery’s education and other divisions.

Adjusted Q4 operating income before depreciation and amortisation (OIBDA) increased 10% to US$636 million due to 9% growth at International Networks, 7% growth at US Networks, and a profit at education and other compared to a loss in the prior year, partially offset by higher corporate costs.

However, Discovery reported a Q4 loss of US$1.14 billion as improved operating results were more than offset by a US$1.32 billion goodwill impairment charge, US$59 million of after-tax Scripps Networks transaction-related costs and currency-related transactional losses compared to gains in the prior year.

Commenting on the results, Zaslav said: “2017 was an historic year for Discovery. We took significant steps to position ourselves for success in a changing industry, while driving growth from our traditional linear business and accelerating our investments in new growth areas like digital and mobile in an effort to reach superfans on every screen.”

“Solid global advertising and distribution revenue growth helped us achieve our 2017 strategic and financial objectives. Additionally, we remain excited by the prospects for a combined Discovery and Scripps Networks.”