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REFILE-UPDATE 3-Televisa makes $1.2 bln investment in Univision

(Corrects to delete repeated paragraph 11)

* Televisa gets a 5 pct stake in Univision

* Televisa gets convertible debt into a 30 pct stake

* Televisa gets option to buy another 5 pct stake

MEXICO CITY, Oct 5 (Reuters) - Mexico's Televisa TLVACPO.MXTV.N will invest $1.2 billion in U.S. broadcaster Univision, strengthening links with a key distributor of its programming among the U.S. Hispanic market.

The investment rekindles a relationship that dates back nearly 30 years, one that had soured in recent years over disputes of royalty payments and board control of Univision.

Televisa will receive a 5 percent stake in Univision, convertible debt into a 30 percent equity stake and an option to buy another 5 percent of the company over an undetermined period.

Televisa will extend its programming agreement with Univision [UVN.UL] to 2020 from 2017, with the option of a further extension to 2025, the firm said on its flagship TV news show in Mexico.

U.S. law prohibits a foreign broadcaster from owning more than a quarter of any U.S. broadcaster.

The two companies battled in court last year over a royalty dispute, although they quickly agreed a settlement.

Univision will also be able to use Televisa’s programs on the Internet, ending a court fight over Internet rights last year. Televisa was banned from streaming TV programs over the Web in the United States that it had already licensed to Univision.

Both companies want a bigger slice of the lucrative Hispanic television market in the United States. Hispanics make up about 15 percent of the U.S. population and that could grow to 25 percent by 2050, according to census forecasts.

Televisa’s U.S. expansion was long hampered by the legal battle with Univision as the Mexican company tried to get more money from its shows aired in the United States, while the U.S. company tried to keep the programs that generated the bulk of its prime-time ratings.

Three Televisa representatives will join the Univision’s board, bringing the total to 20 directors.

Televisa is giving a 50 percent of its TuTv venture with Univision to the U.S. broadcaster as part of the deal.

The U.S. broadcaster will now have digital rights to Televisa’s programming for its three networks, Univision, TeleFutura and Galavision.

Televisa, whose soap operas are a staple in living rooms across the world, also agreed to extend its programming agreement with Univision [UVN.UL] to 2020 from 2017, with the option of a further extension to 2025.

In exchange for the expanded rights and content, Televisa said it will receive increased royalties from Univision, from a current 9.36 percent of television revenue, excluding certain major soccer events, to 11.91 percent of substantially all of Univision’s audiovisual and interactive revenues through December 2017.

From December 2017, Televisa will get 16.22 percent in royalty payments from its U.S. partner.

Televisa’s U.S. expansion was long hampered by the legal battle with Univision as the Mexican company tried to get more money from its shows aired in the United States, while the U.S. company tried to keep the programs that generated the bulk of its prime-time ratings. (Reporting by Cyntia Barrera Diaz; Editing by Derek Caney)

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