BSkyB has entered into agreements with 21st Century Fox to acquire the latter’s 100% stake in Sky Italia and its 57.4% interest in Sky Deutschland for a total cash consideration of GBP4.9 billion (USD8.3 billion), with the aim of creating a multinational pay-TV provider that serves 20 million customers and brings together ‘the leading pay-TV businesses in three of Europe’s four largest markets’. BSkyB says the acquisitions will bring benefits of scale, increasing its customer base from 11.5 million to 20 million, while benefitting from a significantly expanded opportunity for long-term growth and value creation, with 97 million addressable households, of which around 66 million have yet to take pay-TV. The company said the enlarged group will be better positioned to ‘take advantage of the enhanced growth opportunity as result of the ability to share expertise across the wider business’, stating: ’BSkyB, Sky Italia and Sky Deutschland are complementary businesses with a common brand, operating similar business models and offering similar products to customers. Bringing them together will enable the application of best-in-class capabilities in areas such as content, innovation and service delivery, to the benefit all of three businesses and their customers.’
The total consideration for the acquisition of Sky Italia is GBP2.45 billion with approximately GBP2.07 billion to be paid in cash and the remainder through the transfer of BSkyB’s 21% stake in National Geographic Channel International to 21st Century Fox at a value of GBP382 million. The consideration for 21st Century Fox’s shareholding in Sky Deutschland is GBP2.9 billion in cash; following the agreement to acquire the 57.4% stake, BskyB will launch a voluntary cash offer to Sky Deutschland’s minority shareholders at GBP6.75 per share. The cash consideration will be funded through a combination of a placing of 156.1 million new Ordinary Shares (representing approximately 9.99% of the company’s issued share capital), new debt facilities and existing cash resources. The transactions are subject to regulatory and independent shareholder approval.