MEXICO CITY- Shares of Grupo Televisa surged more than 25% on Wednesday after the Mexican broadcaster said it would combine its content with U.S. peer Univision, creating a potential Spanish-language challenge to U.S. streaming giant Netflix Inc.
The combined operation, conceived as a new media company called Televisa Univision, will feature content from both broadcasters, including series, movies, sports, telenovelas and archive content.
The Televisa Univision plan announced on Tuesday was quickly hailed by Mexican President Andres Manuel Lopez Obrador, who dedicated the start of his daily morning news conference on Wednesday to underlining the potential of the tie-up.
Televisa shares leapt almost 28% on Wednesday morning following news of the new company, reaching their highest level since December 2018.
Televisa Univision is planning to launch a global streaming platform in early 2022, Televisa said, competing with other major companies including Netflix.
The new operation will be the largest Spanish-language media company in the world, the company added, and will serve the "significantly underserved Spanish-language market".
Less than 10% of the Spanish-speaking market utilizes a streaming product, versus nearly 70% of the English language market, according to data shared by Televisa.
Even as Lopez Obrador praised the deal, he called on the company to prevent discrimination against the Hispanic community, particularly migrants.
The president, who has pressed companies to ensure they fulfill their fiscal obligations, also said the operation would yield several billion pesos in taxes.
"All taxes will be paid," he said.
(Reporting by Stefanie Eschenbacher and Cassandra Garrison; Additional reporting by Miguel Angel Gutierrez and Noe Torres; Editing by Jan Harvey) ((Stefanie.Eschenbacher@thomsonreuters.com;))