Lionsgate has acquired premium cable net Starz for US$4.4 billion.
The deal had long been mooted with Starz CEO Chris Albrecht (left) telling TBI late last year that consolidation made sense in the current market. The Starz boss renewed his contract at the firm this week until 2020.
The deal sees Hollywood’s largest independent studio buy one of the three US premium cable channel operators. It will have production interests spanning TV and film, and will also have the premium channels and the Starz Play Arabia SVOD service.
“The combination of Lionsgate and Starz brings significant scale to our portfolio of content and distribution assets and will enable us to compete successfully in today’s rapidly evolving global entertainment marketplace,” said Mark H. Rachesky, Lionsgate’s chairman of the board.
“By bringing together complementary resources, premium quality intellectual property and exceptional management, this strategic transaction positions us extremely well to unlock the underlying value of our content to create substantial lasting value for our shareholders.”
The agreement sees Starz common stock holders receive US$18 and 0.7% of a Lionsgate non voting share, for each of their shares.
Lionsgate CEO Jon Feltheimer (right) and vice chairman Michael Burns said in a statement: “We expect the acquisition to be highly accretive, generate significant synergies and create a whole that is greater than the sum of its parts.
“Chris Albrecht and his team have built a world-class platform and programming leader, and we’re proud to marshal our resources in a deal that accelerates our growth and diversification, generates exciting new strategic content opportunities and creates significant value for our shareholders.”
The Starz channel bouquet includes the core Starz net as well as others including Starz Encore and Movieplex. It competes with HBO and Showtime in the premium space, and has had success with original series such as Power, Outlander and Black Sails. It has not launched its linear channels outside of the US, where, like Lionsgate, it is listed.
Lionsgate, meanwhile, produced AMC’s Mad Men and Netflix’s Orange is the New Black among other shows. It also produces the Twilight movies through it Summit Entertainment subsidiary and distributes The Hunger Games.
Both Lionsgate and Starz have international distribution units.
Greg Maffei, chairman of Starz, said: “Together, Lionsgate and Starz form an entertainment powerhouse with a world-renowned studio that produces blockbuster movies and channels with must-have programming that will be able to capitalise on content opportunities across multiple platforms.
“The combined company will be well-positioned to return more value to our shareholders and effectively compete in the global media marketplace.”