BSkyB to pay $8 billion to create Sky Europe
Britain’s BSkyB has agreed to pay around 4.9 billion pounds ($8.3 billion) to buy Rupert Murdoch’s pay-TV assets in Germany and Italy, responding to the slowing growth at home with a deal to create a European media powerhouse.
BSkyB, 39-percent owned by Rupert Murdoch’s 21st Century Fox, will pay for the deal with cash, debt and by a placing of shares that represents around 10 percent of the firm’s issued share capital.
BSkyB said under the deal it would pay 2.45 billion pounds for Sky Italia and 2.9 billion pounds for Fox’s 57 percent stake in Sky Deutschland to create a combined group with nearly 20 million customers.
The payment for Sky Italia will be made up of cash and BSkyB’s stake in the National Geographic Channel. It expects to realize 200 million pounds of run-rate cash synergies by the end of the second full financial year after completion, with further additional synergies to come.
The FTSE 100 listed company announced the deal as it published full-year results in line with forecasts.
The 25-year-old BSkyB, has grown to dominate the British pay-TV market, drawing more than 10 million homes with its programming including sports, movies and U.S. drama. A move into Italy and Germany, where pay-TV is not yet as popular or profitable, would offer BSkyB a new source of growth away from Britain, where it is facing its first real challenger in the form of telecoms group BT A combined Sky Europe would have around 20 million subscribers. Murdoch’s 21st Century Fox, which owns 100 percent of Sky Italia, 57 percent of Sky Deutschland and 39 percent of BSkyB, is in the process of trying to buy Time Warner.
Under German takeover law, it will have to make an offer for the rest of Sky Deutschland. The offer will be at 6.75 euros per share.
($1 = 0.5885 British Pounds)
(Reporting by Kate Holton; editing by Paul Sandle)
Source: Reuters
