Discovery Holding Company and Advance/Newhouse are combining their respective stakes in cable net Discovery Communications (NSDQ: DISCA) to form a new, unified holding company—making Discovery a fully public company. The two signed a letter of intent that will bring DHC’s 66 percent stake with Advance/Newhouse’s 33 percent stake in the holding company, which has yet to be given a name. Cox Communications sold its 25 percent stake to Discovery for $1.2 billion in March.

The deal calls for DHC to spin off the networks and other businesses under its Ascent Media Group production services unit to its shareholders and for DHC to then combine with a new holding company. Existing DHC stockholders will receive shares of common stock of the new publicly traded holding company. On the Advance/Newhouse side, the company will combine its interests in Discovery Communications and the Animal Planet unit with the new holding company and exchange its holdings for preferred stock that will be converted into shares equal to one-third of the outstanding shares of the new holding company.  No management changes expected as a result; in fact, this should make it easier for CEO David Zaslav. More details in the release.

• Discovery Buying Out Cox’s Stake For $1.2 Billion