In a deal that’s been in development for months, Rupert Murdoch’s 21st Century Fox and British pay TV company British Sky Broadcasting Group have purportedly finalized a deal to give BSkyB a controlling interest in the European Sky TV companies that Fox owned.
21st Century Fox will retain its 39 percent ownership stake in BSkyB, but is selling off its 100 percent stake in Sky Italia and approximately 57 percent stake in Sky Deutschland. According to media reports, the deal could net Fox roughly $7 billion in after-tax funds. Fox 21 will also receive BSkyB’s 21 percent interest in National Geographic Channels International.
Also read: Liberty Global Acquires BSkyB’s Stake in UK’s ITV Network for $825 Million
It could be a move toward another bid from Fox to buy Time Warner, which recently rejected an $80 billion offer from the company.
BSkyB will attempt to purchase the remainder of Sky Deutschland, which is owned by publicly traded shares. If the shareholders accept the company’s offer to buy them out, it will solidify its control over both entities.
“We have always believed that a combination of the European Skys would create enormous benefits for the combined business and for our shareholders,” James Murdoch, Co-Chief Operating Officer of 21st Century Fox said in a statement. “Ultimately, a pan-European Sky is good for customers, who will benefit from the accelerated technological innovation and enhanced customer experience made possible by a fully integrated business.”
Also read: Jane Fonda on Rupert Murdoch Buying Time Warner: ‘It Would Be a Catastrophe’
Jeremy Darroch, chief executive of BSkyB, told The Guardian, “This transaction will create a world-class, multinational pay TV business with enhanced headroom for growth and immediate benefits of scale. The three Sky businesses are leaders in their home markets and will be even stronger together. By creating the new Sky, we will be able to use our collective strengths and expertise to serve customers better, grow faster and enhance returns.”
The deal propels BSkyB into being a market leader in the European pay TV market, allowing it greater negotiating leverage and buying power in some of Europe’s largest and wealthiest markets. The acquisitions effectively triples the potential customer base for the company.