(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.
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.