Comcast splits media and connectivity businesses

• Comcast (NASDAQ:CMCSA) plans to split into two public companies by spinning off NBCUniversal and Sky.
• The stock jumped 23% in pre-market trading after the announcement of the separation plan.
• Shareholders will receive ownership in both companies once the tax-free spin-off is completed.

Comcast (NASDAQ:CMCSA) said it will divide its operations into two standalone public companies, separating its media assets from its connectivity and technology businesses through a tax-free spin-off.

The move comes after a period of weakness in the stock, with Comcast shares falling about 30% over the past year and 17% year-to-date amid pressure on traditional cable and shifting viewing habits.

“Comcast will continue to build on its leadership in connectivity, while NBCUniversal, together with Sky, will have the scale, brands, content and financial resources to compete as a premier global media and entertainment company,” said Comcast co-CEO Mike Cavanagh.

The separation will split NBCUniversal and Sky into a new independent media and entertainment company, while Comcast will retain its connectivity-focused business.

The transaction is expected to take about one year to complete, and shareholders will hold stakes in both entities after the spin-off is finalized.

Leadership changes will see Mike Cavanagh become CEO of NBCUniversal, while former CFO Michael Angelakis will lead the remaining Comcast business, with Brian Roberts continuing oversight of both companies.

Comcast said the structure is intended to allow each business to operate independently with separate strategic focus areas.