It is officially announced by News Corp that it will split its entertainment and publishing businesses in the 28th of June.
The board approved separation into 2 firms that would both be lead by current chairman as well as Rupert Murdoch, the chief executive.Publishing firm would retain the brand News Corp and the other would be renamed as 21st Century Fox.
The shareholders had already voiced their worries regarding damage by the events at News of World.
According to News Corp, last year it was to separate its publishing and entertainment businesses, partly due to scandal of UK phone-hacking in the year 2011 in which the journalists gained access to many famous people’s phone messages illegally and bribed members in police force of UK. After the scandal, the newspaper News of the World was closed down in 2011.
Mr Murdoch said that the announcement that day was an important step for creation of 2 independent companies that would have world’s top portfolios of media and entertainment and publishing assets. He further said that they still believed that separation would unlock the correct value of the two companies and the distinct assets they had, enabling the investors to get benefit from separate strategic chances due to each division’s focused management.
New News Corp would be a publicly traded Co. and an independent one. Also it would have $2.6 billion in cash at the time of completion of separation at next month’s end, as told by the board.
The spin-off of publishing would retain the newspaper titles’ ownership, including Times and Wall Street Journal newspapers in the UK.More lucrative film and TV business would include news channel of US Fox News as well as 20th Century Fox Film Studio. The services it provides in Asia and Europe include Sky Italia, Sky Deutschland and the stakes in Tata Sky and BSkyB. But the 21st Century Fox wouldn’t retain any interest of ownership in the News Corp, as told by the board. In addition to this, board approved distribution of a share of new News Corp against every 4 owned by current investors of News Corp.
Also, it authorized $500 Million program of stock repurchase for this new News Corp after the separation.
One of Mr Murdoch’s friends, Robert Thomson would lead this new group of publishing as the chief executive.