Nielsen is by far the biggest research company worldwide but the global market has seen slow to no growth over the past few years. Last year, hedge fund Elliott Management Corp acquired an 8.4% stake in Nielsen Holdings, with the aim of putting pressure on the Nielsen Board to sell the company. On September 12, 2018, Nielsen’s board of directors announced a strategic review process after its ‘Buy’ division saw consecutive revenue declines and share prices plummeted.
The review included a broad range of options: continuing to operate as a public, independent company; a separation of either Nielsen’s Connect or Media segments; or a sale of the company.
Following
its review, Nielsen has now announced plans to spin off its Global Connect
business creating two independent publicly traded companies. The two new
companies will be known as Nielsen Global Media and Nielsen Global
Connect. Nielsen says the approach it has chosen will enable each business
to drive results with a single focus and a structure that will allow for faster
decision-making; while implementing distinct ‘fit-for-purpose’ capital
structures aligned with growth plans.
Nielsen Global Media will provide media and advertising clients with metrics to
define who they want to reach; and Nielsen Global Connect will provide consumer
packaged goods manufacturers and retailers with information and a complete
picture of the marketplace.
As
the company prepares for the separation, it has been developing capital
structure targets for both businesses, and the Board of Directors has approved
a reduction in its quarterly cash dividend payment, with the goal of
strengthening the two prospective balance sheets ahead of the separation. The plan
is to complete the transaction in nine to twelve months.
With the review now completed, James Attwood resumes his role as Chairman
of the Board, after serving as Executive Chairman, overseeing the review. After
the separation is finalised, current Chief Executive David Kenny (pictured) will
serve as the CEO of Nielsen’s Global Media business, and the firm has now begun
a search for a CEO for the Global Connect business.
Separately, for the third quarter, Nielsen’s revenues rose 1% to $1.6 billion (or 2.4% on a constant currency basis) compared to the prior year. Net loss for the third quarter was $472 million, compared to net income of $96 million in the third quarter of 2018.
