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Nielsen to split into two companies
Posted on Friday, 08 November 2019 12:57
Nielsen Holdings has completed its strategic review and decided to spin off its global connect business into a public traded company, therefore separating the unit from the media operations to better sharpen strategic focus at both companies.
The deal follows pressure from activist investor Elliott Management last year, which caused the group to explore a sale, drawing interest from Blackstone and Carlyle, people familiar with the matter told Bloomberg at the time.
In a separate statement, the hedge fund said the separation into two companies will unlock substantial value.
Shareholders in Nielsen will receive 100.0 per cent of the stocks in the new entity, to be named Nielsen Global Connect, which will qualify as tax-free.
In addition, the spun-off group is expected to raise new debt to be used to reduce the obligations at the main company.
Completion is expected within the next nine to twelve months and is subject to final board approval, the receipt of an opinion from counsel and ruling regarding the US federal income tax treatment of the distribution.
Also, Nielsen Global Connect will have to file a registration document for an initial public offering with the US Securities and Exchange Commission.
The group provides consumer packaged goods manufacturers and retailers with information on the complex and changing marketplace that brands need to grow their operations.
It has data and insights, with open cloud measurement and an analytics platform.
Nielsen Global Media will comprise the media and advertising clients, which operate in a USD 600.00 billion global market.
The company will adjust dividend to strengthen its balance sheet ahead of the separation and provide added flexibility to invest for growth.
Shares in Nielsen closed down slightly to USD 19.91 yesterday, giving the group a market capitalisation of USD 7.08 billion.
Yesterday, the business also announced its financial results for the nine months to 30th September 2019, generating revenue of USD 4.81 billion, a slight decrease from USD 4.86 billion in the corresponding period of 2018.
Adjusted earnings before interest, taxes, depreciation and amortisation was unchanged in a year-on-year comparison at USD 1.36 billion in Q1-3 2019 and Q1-3 2018.
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