Discovery to buy HGTV owner Scripps for $14.6 billion

Discovery Communications (NASDAQ:DISCA) said Monday it will buy Scripps Networks Interactive (NASDAQ:SNI) for $14.6 billion, adding cable channels HGTV and Food Network to its portfolio.

The deal gives the two media giants more firepower as they compete with streaming video content and guard against cord-cutting, which has caused pay-TV companies to lose subscribers. With a larger stable of networks, Discovery can seek better contract terms with cable providers and streaming services like Netflix (NASDAQ:NFLX), Amazon.com (NASDAQ:AMZN) and Sling TV. Discovery could also choose to launch its own online bundle of popular channels.

In addition to its namesake channel, Discovery owns TLC, Animal Planet and car network Velocity. It also co-owns Oprah Winfrey’s OWN in the U.S. HGTV, Food Network, Travel Channel, DIY Network and Great American Country are under the Scripps umbrella.

Discovery and Scripps control a combined 20% of all cable viewership, according to analysts at Barclays.

“We believe that by coming together with Scripps, we will create a stronger, more flexible and more dynamic media company with a global content engine that can be fully optimized and monetized across our combined networks, products and services in every country around the world,” David Zaslav, Discovery’s president and CEO, said in a statement.

Discovery agreed to pay $90 a share for Scripps, or $63 a share in cash and $27 a share in Class C common shares of Discovery. Excluding Scripps’ debt, the deal is worth about $11.9 billion.

Discovery fell 2.6% to $26.10 in recent trading. Scripps rose 1% to $87.71.