Lionsgate agrees to buy Starz for $4.4bn

Film and TV studio Lionsgate has agreed a takeover of cable broadcaster and programming producer Starz for $4.4bn in cash and stock, the Hunger Games and Twilight producer said on Thursday.

The deal will create the largest independent television business in the world, Lionsgate said, with a 16,000-title film and television library and a feature film business that has generated over $7bn at the global box office over the past four years.

Starz, which is 49% owned by John C Malone after his Liberty Media spun it out as Encore Media in 1991, is a provider of subscription film and TV programming on US pay television networks with a strong level of global content distribution.

Lionsgate expects the acquisition of to be "highly accretive" to earnings and generate significant cost synergies.

"The combination of Lionsgate and Starz brings significant scale to our portfolio of content and distribution assets and will enable us to compete successfully in today's rapidly evolving global entertainment marketplace," said Lionsgate chairman Mark Rachesky.

"By bringing together complementary resources, premium quality intellectual property and exceptional management, this strategic transaction positions us extremely well to unlock the underlying value of our content to create substantial lasting value for our shareholders."

Merging with Starz is not only expected to generate significant revenue and cost synergies, but operationally will broaden its premium scripted programming and improves global distribution across mobile, broadband, cable and satellite platforms.

Lionsgate also highlighted the accelerated growth of Lionsgate and Starz's own over-the-top (OTT) services.