Comcast Corporation announced on Monday that it will separate its media and entertainment assets from its connectivity business through a tax-free spin-off of NBCUniversal and Sky, triggering a share-price surge of more than 20% in premarket trading. The move effectively reverses a strategy pursued since Comcast’s acquisition of NBCUniversal from General Electric a quarter-century ago, which was built on the premise that owning both content and the pipes that deliver it would create competitive advantage.

The transaction, expected to close within a year pending board and regulatory approvals, will create two independent publicly traded companies. One entity will retain the Comcast name and focus on broadband, cable television and mobile services. The other, a new media and entertainment group, will house the NBC and Telemundo networks, Universal film and television studios, theme parks, the Peacock streaming service, the Bravo channel and the European pay-TV operator Sky. Comcast shareholders will hold equity in both firms, and the parent intends to keep a stake of up to 19.9% in the media company for as long as a year after completion, before monetising it in a tax-efficient manner.

Leadership of the two companies will shift. Brian Roberts, Comcast’s chairman and co-chief executive, will remain actively involved in both. Mike Cavanagh, currently co-CEO, will become chief executive of NBCUniversal, while former Comcast finance chief Michael Angelakis will take the helm of the connectivity-focused Comcast. The reorganisation follows an earlier spin-off of Comcast’s declining cable networks into a separate entity called Versant Media, a move that had already signalled a retreat from the integrated model.

Viewed from European markets, the inclusion of Sky gives the new media company a substantial footprint across the continent, adding a layer of regulatory complexity. Approvals from authorities in Brussels and London are likely to be required alongside those in the United States. The decision to split reflects a broader industry trend: AT&T and Verizon both unwound similar content-and-distribution combinations in recent years, and investors have increasingly rewarded pure-play structures. Comcast’s stock had lost roughly a quarter of its value this year before the announcement, as the company faced intensifying competition in broadband and streaming.

The next factual milestone will be the formal filing of separation documents with regulators and a final vote by Comcast’s board. While the market’s initial reaction suggests strong investor support, the year-long timeline leaves room for adjustments to the structure or the eventual monetisation of the retained stake.