Comcast Plans Tax-Free Spin-Off of NBCUniversal and Sky

Comcast shares jumped 23 percent in pre-market trading after the company announced plans to spin off NBCUniversal and Sky into a separate publicly traded company through a tax-free transaction. The move would leave current Comcast shareholders owning interests in both the remaining broadband-focused business and the new media company. The transaction is expected to close in about one year.

Comcast would continue to focus on broadband, wireless, business services, and entertainment platforms serving more than 65 million homes and businesses.

NBCUniversal, which will include Sky, will contain Universal film and television studios, NBC, Telemundo, Peacock, Bravo, sports, news, and theme parks. The company stated the standalone media business will have the scale, content library, and intellectual property needed to compete with leading streaming platforms.

Mike Cavanagh will become CEO of NBCUniversal, and former Comcast CFO Michael Angelakis will return as CEO of Comcast. Comcast expects to retain up to a 19.9 percent stake in NBCUniversal for up to one year after the spin-off and plans to monetize that position over time in a tax-efficient manner.

Both businesses are expected to have strong investment-grade balance sheets. Goldman Sachs and PJT Partners are advising Comcast on the transaction, with Davis Polk serving as legal counsel. On the year, shares are down 17 percent as of Friday's close.

The 23 percent pre-market gain is the largest intraday increase since October 28, 2008.