MUMBAI: Dow Jones & Company has announced it is ending its international partnership with CNBC. The company, however, has no plans to alter the Dow Jones and CNBC licensing relationship in the US.
Dow Jones has entered into a definitive agreement with NBC Universal to transfer its 50 per cent equity interests in both CNBC Europe and CNBC Asia (CNBC International), as well as its 25 per cent interest in CNBC World, to NBC Universal as of 31 December, 2005 for nominal consideration, informs a media release.
CNBC will assume full control of the CNBC International channels, its parent NBC Universal simultaneously announced. CNBC will acquire sole ownership of CNBC Europe and the domestic digital service, CNBC World subject to obtaining the necessary regulatory and legal approvals.
CNBC and Dow Jones have operated CNBC Europe and CNBC Asia Pacific as equal partners and Dow Jones currently has a 25 per cent interest in CNBC World.
Dow Jone chairman and chief executive officer Peter R Kann said: "We value our long and profitable relationship with CNBC. At CNBC US, we look forward to continuing it under our existing US license agreement. At CNBC International and World, we and NBC Universal have agreed for Dow Jones to exit the partnership to eliminate our share for business reasons and simplify NBC Universal's ability to deploy its assets to continue to grow these operations. We look forward to supporting NBC Universal's efforts."
The Dow Jones share of losses from CNBC Europe, CNBC Asia and CNBC World totaled $17 million in 2004, adds the media release. The company will provide an update on the impact of this transaction on third and fourth quarter results during the company's second quarter analyst call on 21 July.
Kann adds: "This is the latest in a series of moves by Dow Jones to improve profits and strengthen our portfolio. We're investing in exciting new initiatives where we have strong competitive advantages such as the launch of the Weekend Edition of The Wall Street Journal, the acquisition of MarketWatch and the repositioning of our international print and online operations, and exiting those where we do not."
The company expects to record a one-time, after-tax special charge of approximately $36.7 million, or 44 cents per diluted share, in the second quarter. About $32.1 million, or 39 cents per share, will be a non cash write-off of its carrying value in the transferred assets, and the remaining $4.6 million, or 5 cents per share, is to cover its maximum after-tax cash funding commitment for the balance of 2005.
According to MarketWatch, Dow Jones shares closed ahead of the news 20 July (Wednesday) at $37.89, up 2.74 per cent and rose as high as $38 in after-hours trading.
