UK pay-television broadcaster BSkyB has confirmed deals to acquire media company 21st Century Fox’s 100 per cent stake in Sky Italia and 57.4 per cent interest in Sky Deutschland, bringing together the leading pay-television businesses in three of Europe’s four biggest markets.
The total consideration for the acquisition of Sky Italia is £2.45bn (€3.07bn/$4.19bn) with approximately £2.07bn to be paid in cash and the balance to be satisfied through the transfer of BSkyB’s 21 per cent stake in National Geographic Channel International to 21st Century Fox at a value of £382m.
The acquisition of Fox’s shareholding in Sky Deutschland is for a consideration of £2.9bn in cash, valuing Sky Deutschland at €6.75 ($9.2) per share. BSkyB will launch a voluntary cash offer to Sky Deutschland’s minority shareholders at €6.75 per share. BSkyB said: “There is no minimum acceptance condition as BSkyB believes it can realise the advantages of closer collaboration with Sky Deutschland and support its continued growth and development with the 57.4 per cent stake it is acquiring through this transaction.”
Subject to the number of Sky Deutschland minority shareholders that accept the offer, the total cash consideration for the agreements may be up to approximately £7bn. The transaction will be funded in part by the proceeds of a placing of 156.1 million new ordinary shares representing approximately 9.99 per cent of the issued share capital of BSkyB.
Fox will participate in the placing pro rata in order to maintain its holding in BSkyB at the current level of 39.14 per cent. The remaining consideration will come from a combination of new debt facilities and cash resources.
BSkyB said the enlarged business will benefit from a significantly expanded opportunity for long-term growth and value creation, with 97 million addressable households. Of these households, around 66 million have yet to take pay-television and BSkyB said there is “significant headroom” to sell additional products to and launch new services for customers.
Sky, Sky Deutschland and Sky Italia are all major sports broadcasters, with each having live rights to their respective top football divisions. Analysts have said the new pay-television force would be able to compete more aggressively for pan-European sports media rights.
Jeremy Darroch, BSkyB’s chief executive, said: “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 transactions are subject to regulatory and independent shareholder approval.