BSkyB’s £7 billion interest in Sky Italia and Sky Deutschland will help streamline the business across content, technology and logistics.
The UK satcaster has moved to take control of Sky Italia with the purchase of the Italian platform from 21st Century Fox. It has also acquired a 57.4% interest in Sky Deutschland. The cost is £4.9 billion and the transfer of BSkyB’s 21% stake in National Geographic Channel.
The total cost of the Sky Italia purchase has been set at £2.45 billion with approximately £2.07 billion to be paid in cash and the balance to be satisfied through the transfer of BSkyB’s 21% stake in National Geographic Channel to 21st Century Fox at a value of £382 million.
BSkyB is making an offer to minority shareholders in Sky Deutschland at €6.75 per share. In a statement, BSkyB said that 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% stake it is acquiring through this transaction.
Jeremy Darroch, BSkyB’s Chief Executive, said there were opportunities across the board: “Each company has launched its own version of Sky Go, working separately on different timescales and technology platforms. In future we’d be able to work with a single product specification, technology development process, getting the best product to market faster,” At present even though BSkyB assembles the set-top box for Sky Italia, it still puts in a different API for its Italian counterpart. This is set to change.
Such a deal had been on the cards for several months with speculation intensifying in recent days. It comes after 21st Century Fox made an $80 million bid for the US media giant Time Warner.
“Despite Italy’s economic challenges in recent years, Italy remains attractive as the fourth largest market in Europe. Relative to other markets there’s low penetration in terms of customers, and products, while Italy’s strong culture of sport creates a favourable backdrop to pay-TV, said Darroch. “Sky Deutschland successfully growing penetration and customers and products from the traditionally low levels seen in Germany. It’s making good progress in the quality of its customer base with both churn and ARPU doing well.”
BSkyB has seemingly softened its line on Sky Deutschland’s minority shareholders. The 57.4% interest is enough to hold control.
Sky Deutschland noted in a release that its management and supervisory boards will evaluate BSkyB’s voluntary cash offer to the German pay-TV broadcasters’ minority shareholders with the support of both financial and legal advisors. After publication and review of the tender offer, the boards will issue an official statement as required under German law.
No regulatory approval will be required in the UK and EU approval is expected in October.
