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Discovery to buy Scripps Networks in bid for content clout

NEW YORK (Reuters) - Discovery Communications Inc is acquiring Scripps Networks Interactive Inc 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...


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