BSkyB, a British pay-TV company controlled by media magnate Rupert Murdoch, has agreed to buy Murdoch-controlled sister companies Sky Italia and Sky Deutschland. The move creates a consolidated European pay-TV giant.
In exchange for its acquisition of Murdoch's stake in Sky Italia and Sky Deutschland, BSkyB would pay 21st Century Fox a total of 4.9 billion pounds (6.2 billion euros, $8.3 billion) and transfer BSkyB's 21-percent stake in National Geographic Channel, the British pay announced on Friday
Before the deal, 21st Century Fox owned 100 precent of Sky Italia and 57 precent of Sky Deutschland. Under German law, BSkyB will have to offer to buy out minority shareholders of Sky Deutschland. The price is set at 6.75 euros per share.
According to a BSkyB press release, the consolidation of the three European Sky brands "will lead to expanded growth opportunities, benefits of scale and significant synergy potential".
BSkyB looking to dominate European pay-TV market
BSkyB is the largest pay-TV broadcaster in the UK and Ireland, with over 10 million subscribers. With its acquisition of sister companies Sky Italia and Sky Deutschland, it will have 20 million European subscribers under consolidated London-based management.
BSkyB's move to create a European pay-TV giant is motivated by the fact that it has saturated its home market. Pay-TV is much better developed in Britain than on the European continent, and opportunities for growth in the UK are constrained by the maturity of the country's pay-TV market and the entry in 2006 of a powerful competitor, BT TV, a unit of British Telecom, which has just over a million subscribers.
Tireless Murdoch on an acquisition binge
A controlling 39-percent stake in BSkyB is owned by 21st Century Fox, the holding company for the influential conservative media tycoon's broadcast and film assets. Murdoch's print and online assets are held by a separate company, News Corp.
Interlocking corporate ownerships are standard fare in the world of big business, and the media world is no exception. Australian-American media magnate Rupert Murdoch, 83, has been on a major acquisitions and restructuring binge.
In 2013, he split his holding company, News Corporation, into two parts - News Corp and 21st Century Fox - in order to separate his visual media from his written media assets, a move intended to improve management's focus.
nz/uhe (Reuters, ots)