Discovery Communications is acquiring Scripps Networks Interactive for $11.9 billion in a deal expected to boost the company's negotiating leverage as pay TV operators lose subscribers and it seeks new audiences.

The acquisition, which was completed Sunday night and announced on Monday, brings together Scripps' largely female audience of lifestyle channels such as HGTV, Travel Channel and Food Network with Discovery's Animal Planet and Discovery Channel, which primarily has male viewers.

Despite expectations of $350 million in total cost synergies, many analysts questioned how the combined company would compete long term as viewers cut cords to cable providers and as advertising and ratings decline.

Discovery stock slid 8.6 percent to $24.50 while Scripps was up 0.5 percent to $87.31.

Discovery is paying 70 percent cash and 30 percent stock for Scripps. The total price of the deal is $14.6 billion including debt.

"While we believe the two companies are likely better positioned together, rather than apart, the longer-term issues facing the industry still remain," wrote John Janedis, an analyst at Jefferies, in a note on Monday.

TV ratings and ad revenue are declining as young viewers opt to go online to watch shows and movies. Five of the largest U.S. pay TV providers posted subscriber losses during the second quarter.

The combined company's larger programming slate might give it an advantage in negotiations for inclusion in skinny bundles, or economy-priced cable packages that offer fewer channels than a standard contract.

Post-merger, the company will offer 300,000 hours of content and capture about 20 percent share of ad-supported cable audiences in the United States, the company said on an analyst call Monday morning.

"The transaction supports and accelerates Discovery's pivot from a linear TV-only company to a leading content provider across all screens and services around the world," said David Zaslav, Discover's chief executive officer, on the call.

The combined company would also have more muscle in negotiations with cable and other distributors when contracts come up for renewal, executives said.

By adding Scripps programming, Discovery could also launch its own "skinny bundle" of networks at a low cost, executives said.

U.S television networks and cable providers are under pressure as more viewers watch their favorite shows and movies on phones and tablets. There is also increased competition for viewers from streaming services such as Netflix and Amazon.com.

The combined company would be home to five of the top cable networks for women with over 20 percent share of women prime-time viewers in the United States, according to Discovery.

Scripps has been considered a takeover target since the Scripps family trust, which controlled the company, was dissolved five years ago.</s>NEW YORK (Reuters) - Discovery Communications Inc is acquiring Scripps Networks Interactive for $14.6 billion in a deal that is expected to boost the combined company's negotiating leverage with pay TV operators at a time when more people watch video online, the companies said on Monday.</s>FILE PHOTO: The Discovery Communications headquarters building is seen in Silver Spring, Maryland December 3, 2009.

(Reuters) - Discovery Communications Inc (DISCA.O) is acquiring Scripps Networks Interactive (SNI.O) for $14.6 billion in a deal that is expected to boost the combined company's negotiating leverage with pay TV operators at a time when more people watch video online, the companies said on Monday.

The acquisition, which was completed last night, brings together Scripps' largely female audience of lifestyle channels such as HGTV, Travel Channel and Food Network with Discovery's Animal Planet and Discovery Channel, which primarily has male viewers.

Discovery is paying 70 percent cash and 30 percent stock for Scripps, according to the source.</s>July 31 (Reuters) - Discovery Communications Inc is acquiring Scripps Networks Interactive for $14.6 billion in a deal that is expected to boost the combined company's negotiating leverage with pay TV operators at a time when more people watch video online, the companies said on Monday.

The acquisition, which was completed last night, brings together Scripps' largely female audience of lifestyle channels such as HGTV, Travel Channel and Food Network with Discovery's Animal Planet and Discovery Channel, which primarily has male viewers.

Discovery is paying 70 percent cash and 30 percent stock for Scripps, according to the source.</s>NEW YORK (Reuters) - Discovery Communications Inc is acquiring Scripps Networks Interactive for $14.6 billion in a deal that is expected to boost the combined company's negotiating leverage with pay TV operators at a time when more people watch video online, the companies said on Monday.

The acquisition, which was completed last night, brings together Scripps' largely female audience of lifestyle channels such as HGTV, Travel Channel and Food Network with Discovery's Animal Planet and Discovery Channel, which primarily has male viewers.

With the acquisition, Discovery can cut costs and use Scripps's shows to further its international reach. The combined company's larger programming slate might also provide leverage in negotiations for inclusion in skinny bundles, or economy-priced cable packages that offer fewer channels than a standard contract.

The combined company will have 20 percent total cable viewership, according to a recent Barclays note. That will strengthen its negotiating stance when renewing contracts with distributors. By adding Scripps programming, Discovery could also launch its own "skinny bundle" of networks at a low cost.

U.S television networks and cable providers are under pressure as more viewers watch their favorite shows and movies on phones and tablets. There is also increased competition for viewers from streaming services such as Netflix Inc and Amazon.com Inc.

Scripps has been considered a takeover target since the Scripps family trust that controlled the company was dissolved five years ago.

This marks at least the third time that Discovery, whose shareholders include cable magnate John Malone, has tried to buy Scripps. Discovery outbid Viacom Inc for Scripps, which Reuters first reported Wednesday.

Investors are largely positive on the deal for the synergies the combined company will see and the leverage it will have with pay TV partners. Since news of Discovery's talks started, Discovery is up almost 3 percent, while Scripps is up almost 30 percent.

But many analysts question how the combined company will compete long-term as viewers keep cutting cords to cable providers and advertising and ratings decline.

"If there were no secular concern, this deal would be a slam dunk," wrote Barton Crockett an analyst at FBR Capital Markets, on July 27. While ratings for both companies have been solid, "investors don't trust that this can continue, and we're not sure what turns that fear around."

Discovery is paying 70 percent cash and 30 percent stock for Scripps.</s>DEVELOPING: Discovery Communications CEO David Zaslav and Scripps Networks Interactive CEO Ken Lowe discuss the multi-billion dollar deal between the two companies on Mornings with Maria at 7 a.m.</s>SILVER SPRING, Md. — Discovery Communications is buying Scripps Networks Interactive Inc. in a cash-and-stock deal worth $14.6 billion.

The transaction is valued at $90 per share, about a 4 percent premium to Scripps' Friday closing price of $86.91.

The buyout is targeted to close by early next year.</s>Just a few weeks after an initial report saying the two media companies were in talks, Discovery Communications has merged with Scripps Networks Interactive, with Discovery paying $14.6 billion, including Scripps' debt, for the suit of lifestyle networks.

Discovery will pay a combination of stock and cash equivalent to $90 per share, or 34% more than Scripps' closing price on July 18, when the talks of the deal were first reported. Since then, both companies have seen their share prices skyrocketed.

The deal is a win-win. As a consolidated unit, the media companies can pool resources and cut costs to the tune of $350 million, according to Discovery. Together, they will also produce and hold an impressive amount of content, or about 8,000 hours of original programming annually and a library of 300,000 hours of content.

This will allow the network group to hold more leverage in negotiations with distributors like Comcast or AT&T and with media buyers hungry for eyeballs—particularly female ones. Having power in these deals is more and more important as traditional television loses viewers to digital streaming services. These channels together could even make for their own skinny bundle focused on nonfiction and lifestyle content.

While talks of the merger only reemerged in July, they originally began about five years ago. The deal brings together two similar media companies that both peddle cable networks focused on reality and lifestyle programming. Discovery’s brands include Discovery Channel, Animal Planet and TLC, and Scripps’ include HGTV, Cooking Channel, Food Network and the Travel Channel.

"We believe that by coming together with Scripps, we will create a stronger, more flexible and more dynamic media company with a global content engine that can be fully optimized and monetized across our combined networks, products and services in every country around the world," said David Zaslav, CEO of Discovery, announcing the deal on a conference call this morning. (Relatively disappointing earnings were announced on the same call.)

The deal is to be approved by the Scripps family, which collectively controls 91.8% of voting shares, as well as billionaire John Malone, who owns abut a third of Discovery's voting shares, and the Newhouse family, another Discovery shareholder. Chairman and CEO of Scripps Kenneth Lowe will join Discovery’s board of directors when the deal finalizes sometime next year.</s>LOS ANGELES – Discovery Communications and Scripps Networks Interactive have reached an $11.9 billion deal to combine, a move aimed at creating a bulwark to withstand the challenges facing the television industry.

Discovery plans to acquire Scripps – the owner of HGTV, Food Network and the Travel Channel – in a cash-and-stock transaction that was announced early Monday. The combination would create a bulked-up programming company commanding nearly 20 percent of cable viewership in the U.S. and significant growth prospects internationally.

The proposed marriage of the two cable programming companies comes after two failed attempts to merge. However, this time the companies were spurred to combine because it has become increasingly difficult for medium-sized independent media firms to stand on their own.

The Discovery-Scripps combination would create a more formidable entertainment company, one with several must-have cable TV channels. The deal is expected to close in early 2018.

“This is an exciting new chapter for Discovery. Scripps is one of the best run media companies in the world with terrific assets, strong brands and popular talent and formats,” David Zaslav, chief executive of Discovery, said in a statement announcing the deal.

Both Scripps – which boasts among the country’s most popular lifestyle channels – and Discovery have been grappling with lower TV ratings and increased competition for viewers. Consumers have been dropping their pay-TV subscriptions in favor of lower-cost digital streaming options, including Hulu, Netflix and Amazon.com.

Those subscriber defections threaten a key source of revenue. Television distributors pay affiliate fees for the rights to carry Scripps’ and Discovery’s channels, and the fees are calculated based on the number of subscribers that receive the channels.

Discovery includes Animal Planet, Discovery, TLC, the crime channel ID (Investigation Discovery) and a stake in the Oprah Winfrey Network. The largest individual voting shareholder of the company, based in Silver Spring, Md., is cable mogul John Malone, who now lives on a sprawling ranch in Colorado.

Competitor Viacom Inc., controlled by the Sumner Redstone family, was said to also be vying for Scripps but dropped out of the bidding last week.

Scripps shareholders will receive $90 per share under the terms of the merger agreement. Of that, $63 will be in cash and $27 per share will be in Discovery’s Class C common stock. The deal price represents a 34 percent premium over Scripps’ share price on July 18, before news of the negotiations between the two companies leaked in news reports.

When the deal is complete, Scripps shareholders would own about 20 percent of Discovery’s fully diluted common shares. Discovery shareholders would hold about 80 percent of the company.

Ken Lowe, the current chief executive of Scripps, is expected to join the Discovery board.</s>Shares of Discovery Communications Inc. (NASDAQ: DISCA) tumbled Monday on news that the company would acquire Scripps Networks Interactive, Inc. (NASDAQ: SNI) in a deal worth $14.6 billion.

Discovery was down 8.4 percent and trading at $24.55 at publication. Scripps was up slightly at $87.31.

Scripps’ shows include lifestyle channels such as the Food Network, HGTV and the Travel Channel while Discovery owns its eponymous channel and Animal Planet.

In a statement, Discovery said it would pay $90 per share, based on Discovery's Friday closing price. The purchase price represents a premium of 34 percent to Scripps' unaffected share price as of July 18, 2017. The transaction is expected to close by early 2018, the companies said.

Discovery and Scripps also announced second-quarter earnings on Monday. Discovery said its net income fell 8 percent to $374 million, or 64 cents per share, down from 66 cents. Adjusted EPS came in at 68 cents, below analyst estimates of 72 cents. Scripps reported preliminary results of $400.8 million, up 20.8 percent.

See Also: Analysts Say 31 Million Households Could Cut Cord On Legacy Media

Discovery Communications CEO David Zaslav and Scripps CEO Kenneth Lowe told analysts the deal would benefit both companies as they seek to compete for viewers who are increasingly dependent on video carried by such companies as Amazon.com, Inc. (NASDAQ: AMZN) and Netflix, Inc. (NASDAQ: NFLX)

"We are building a global content engine," Zaslav said, one that aims to "unlock global strategic synergies, driving significant value." He touted the immediate benefits to shareholders from acquiring a stable of profitable TV networks.

"We may have more IP than any other media company. We're certainly up there," Zaslav said.

Combined, Discovery and Scripps will have nearly 20 percent share of ad-supported pay-TV audiences in the United States, the companies said.

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Discovery Communications announces it will acquire Scripps Networks Interactive for US$ 14.6 billion.