Grupo Televisa, Mexico’s largest broadcaster, said on Tuesday that it will take a stake of up to 35 percent in Univision Communications Inc., ending its differences with the Spanish-language broadcaster owned by an investor group lead by Los Angeles billionaire Haim Saban.

Televisa, which provides programming to Univision but has had a contentious relationship with its American partner, said it will invest $1.2 billion in Univision, which breaks down to a 5 percent equity stake. Convertible debentures could increase that stake an additional 30 percent. Univision must refinance $3.25 billion of debt as part of the deal.

The agreement increases the amount of Televisa content that Univision can run on its networks, and also gives Univision rights to Televisa’s online, pay TV and network content for its own online and interactive venues. Televisa will receive higher royalties for its content, and content agreements between the two companies were extended from 2017 to 2020 – and possibly to 2025 if other conditions are met.

"We are especially optimistic about the long-term growth potential of the U.S. Hispanic media marketplace,” said Televisa Chief Executive Emilio Azcarraga Jean in a statement. “Our economic interest in this premier platform through Univision should further enable us to participate in -- and benefit from -- this potential."

In 2006, Saban lead a group of private equity partners, including Thomas H. Lee Partners, that beat a Televisa bid to buy the then publically held Univision. The company’s corporate headquarters later moved from Los Angeles to New York, but the bulk of operations remains here.

Televisa and Univision have long squabbled in court over royalties and Televisa’s right to distribute its programming to U.S. audiences by means other than Univision’s broadcast and cable stations. After the Saban takeover the dispute heated up, leading to lawsuits.

In July 2009, a federal judge in Los Angeles handed Univision a major victory, saying a long-term programming agreement signed in 1992 barred Televisa from sending programs to the United States by any means, including the Internet. Tuesday’s deal appears to set all those differences aside.

“It’s simply a marriage made in heaven where one plus one equals not three, but four,” Saban told Bloomberg News. “We now have the No. 1 creator of Spanish language content in the world supplying us with the best content we could possibly find anywhere.”

The deal is expected to close in the first half of 2011.

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