MUMBAI: Decks have been cleared for Rupert Murdoch?s global media empire to be split into two companies with the high growth media & entertainment business being separated from the sluggish publishing business.

News Corporation?s Board authorised management to explore this separation after a Board meeting yesterday.

The move, aimed at increasing operational flexibility, will see creation of two distinctly public trading companies which would allow News Corp shareholders to hold interests in a publishing company, consisting of publishing assets and a new digital education group, and a global media and entertainment company.

Upon closing of the proposed transaction, Rupert Murdoch would serve as chairman of both companies and CEO of the media and entertainment company. Chase Carey would serve as President and COO of the media and entertainment company.

Over the next several months, the company will assemble management teams and Boards of Directors for both businesses, News Corp said in a statement.

Murdoch?s decision not to head the new publishing business has sparked speculation that he was setting the stage for the return of his eldest son Lachlan Murdoch to the company.

The separation is expected to be completed in approximately 12 months. Management is developing detailed plans for the Board?s further consideration and final approval. To execute the transaction requires further work on structure, management, governance, and other significant matters.

After receiving final approval of the Board of Directors, News Corporation will convene a special shareholder meeting to consider the transaction. This meeting is not expected to take place until the first half of calendar 2013.

"There is much work to be done, but our Board and I believe that this new corporate structure we are pursuing would accelerate News Corporation?s businesses to grow to new heights, and enable each company and its divisions to recognize their full potential - and unlock even greater long-term shareholder value," said News Corporation Chairman and CEO Rupert Murdoch.

"News Corporation?s 60-year heritage of developing world-class media brands has resulted in a large and unparalleled portfolio of diversified assets. We recognize that over the years, News Corporation?s broad collection of assets have become increasingly complex. We determined that creating this new structure would simplify operations and greater align strategic priorities, enabling each company to better deliver on our commitments to consumers across the globe.

I am 100 percent committed to the future of both the publishing and media and entertainment businesses and, if the Board ultimately approves a separation, I would serve as Chairman of both companies."

The proposed transaction would create global category leaders in both publishing and entertainment: a publishing company, which would consist of News Corporation?s newspapers and information businesses in the U.S., U.K., and Australia, the company?s leading book publishing brands, its integrated marketing services company, its digital education group, as well as its other assets in Australia; and a global media and entertainment company, which would encompass News Corporation?s broadcast and worldwide cable networks, leading film and television production studios, television stations and highly successful pay-TV businesses in Europe and India.

The new global media and entertainment company would consist of News Corporation?s highly-profitable cable and television assets, filmed entertainment, and direct satellite broadcasting businesses, including Fox Broadcasting, Twentieth Century Fox Film, Twentieth Century Fox Television, Fox Sports, Fox International Channels, Fox News Channel, Fox Business Network, FX, Star, the National Geographic Channels, Shine Group, Fox Television Stations, BSkyB, Sky Italia and Sky Deutschland.

The publishing company includes brands like Dow Jones, The Wall Street Journal, Dow Jones Newswires, HarperCollins, The New York Post, and The Daily, as well as offer the rich diversity of assets in Australia, including leading brands such as The Australian, The Herald Sun, The Daily Telegraph and The Courier Mail. In addition, the Company would include The Times, The Sun, The Sunday Times, as well as News Corporation?s integrated marketing services group and its ground-breaking digital education group, including Wireless Generation.

Upon closing of the proposed transaction, News Corporation?s shareholders would receive one share of common stock in the new company for each same class News Corporation share currently held. Following the separation, each company would maintain two classes of common stock: Class A Common and Class B Common Voting Shares.

In addition to shareholder approval, the completion of the separation will also be subject to receipt of regulatory approvals, opinions from tax counsel and favorable rulings from certain tax jurisdictions regarding the tax-free nature of the transaction to the Company and to its shareholders, further due diligence as appropriate, and the filing and effectiveness of appropriate filings with the U.S. Securities and Exchange Commission.