Comcast NASDAQ:CMCSA jumped more than 20% in premarket trading Monday after the company outlined plans to separate its media and entertainment operations from its broadband and wireless business through a tax-free spin-off of NBCUniversal and Sky.
Under the proposed transaction, Comcast shareholders will receive shares in both companies. The new NBCUniversal entity will house the company's film and television studios, Peacock streaming platform, theme parks, NBC and Telemundo networks, as well as European media business Sky. Comcast expects the separation to be completed within approximately one year, subject to regulatory and board approvals.
Comcast said it plans to retain up to a 19.9% ownership interest in NBCUniversal for as long as one year after the transaction closes. The remaining Comcast business will focus on broadband, wireless, and connectivity services.
The move comes as traditional media companies face mounting pressure from streaming competition and shifting viewing habits. Comcast said the separation is intended to provide each business with greater strategic flexibility and a clearer operational focus. Mike Cavanagh is expected to lead NBCUniversal, while former Chief Financial Officer Michael Angelakis is set to become chief executive of Comcast following the separation.