- Comcast shares rose as much as 23% in premarket trading.
- The company said it would split its technology and media businesses into two publicly traded companies.
- Shareholders will own shares in both NBCUniversal and Comcast
Shares of Comcast surged over 20% in premarket trading on Monday after the company announced that it would separate its technology and media businesses into two publicly traded companies.
Comcast shares rose as much as 23% in premarket trading, CNBC reported. The stock was trading 23.74% higher at $28.67 as of 7:32 am ET.
Comcast's decision comes as it looks to compete in a media landscape amid pressure from streaming rivals and consolidation.
The separation aims to create “two focused industry leaders, each with significant scale, strong financial profiles and distinct strategic opportunities,” Comcast said in a release.
The separation will happen through a tax-free spin-off of NBCUniversal and Sky, and will likely be completed in about a year.
Comcast shareholders will own shares in both NBCUniversal and Comcast, the company said in a press release.
Brian L. Roberts, the firm's co-CEO and chair, will continue to be actively involved in the leadership of both Comcast and NBCUniversal.
Comcast co-CEO Mike Cavanagh will assume the post of NBCUniversal's CEO. Michael Angelakis, the company's former Chief Financial Officer, will become the CEO of Comcast.
After the transaction is completed, Comcast expects to retain a stake of up to 19.9% ownership in NBCUniversal for up to one year. It aims to tax-efficiently monetise the stake over time.
The conglomerate had previously separated Versant Media, the home of most of its cable networks, as per The Hollywood Reporter. The move was aimed at creating more focused businesses.
NBCUniversal is anchored by the NBC and Telemundo networks, the Universal film and television studios, the theme parks division, streaming service Peacock as well as the Bravo cable network. The firm's portfolio will include its European media business Sky.
The tax-free spin-off of NBCUniversal and Sky comes as Comcast's share price has fallen 30% over the past 12 months. The media industry is also facing significant challenges driven by the shift towards streaming.
The media sector has seen a wave of consolidation as players aim to increase their scale. Paramount Skydance finished merging last year. It recently won approval to acquire Warner Bros. Discovery for a $110 billion deal. Fox announced a $22 billion agreement to acquire Roku earlier this month.
