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Business

Media mogul Murdoch adds Sky to his empire

Rupert Murdoch's Twenty-First Century Fox has acquired the European pay-TV firm Sky for $14.6 billion, uniting an empire across two continents and creating a new global media titan.

Twenty-First Century Fox said in a statement released in New York on Thursday, it would pay 10.75 British pounds ($13.31, 12.8 euros) per share for the 61 percent of Sky it didn't already own.

The deal values Sky at 18.5 billion pounds and represents a premium of about 40 percent on the share price a day before the initial proposal was received.

Fox said the acquisition "adds the strength of the Sky brand" to the company's portfolio, which already includes cable, broadcast, film, pay TV and satellite assets across six continents, as well as a number of newspapers owned by News Corp.

"It creates a global leader in content creation and distribution, enhances our sports and entertainment scale, and gives us unique and leading direct-to-consumer capabilities and technologies," the statement added.

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Sky - a bargain after Brexit

21st Century Fox already owns a 39.1 percent stake in Sky, whose five main markets are Austria, Britain, Germany, Ireland and Italy with about 22 million subscribers.

Sky broadcasts the 24-hour Sky News channel, blockbuster movies and live English Premier League football, and also provides Internet and telephone services.

People familiar with the deal told the news agency Reuters that Fox executives pounced after Britain's vote to leave the European Union in June. The event, also known as Brexit, has sent the British currency down 15 percent and sent Sky's share price tumbling.

The deal came five years after Rupert Murdoch had failed to clinch a takeover after a notorious phone-hacking scandal at his newspaper empire.

Murdoch scandal

In 2011, the Australian-born media mogul was forced to abandon his previous takeover bid of Sky, which was known as BSkyB at the time, amid a fierce controversy over the hacking of celebrities and crime victims by his tabloid the News of the World.

In January that year, Murdoch's son, James Murdoch, became chairman at BSkyB, which he had previously served as chief executive between 2003 and 2007.

In late 2014, BSkyB changed its name after completing the purchase of Sky Italia and a majority holding in Sky Deutschland, in a move which created a pan-European pay-TV giant.

James Murdoch said he expected the deal to pass "regulatory muster," adding that as long as regulators looked at the facts around media ownership, no "meaningful concessions" would be required.

Part of the deal is also that Fox will pay a 200-million-pound break fee if it fails, and that the bid must win the backing of shareholders representing 75 percent of the Sky stock not owned by Fox.

uhe/jd (Reuters, dpa, AFP)

 

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