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BSkyB acquires Sky Deutschland, Sky Italia

BSkyB will buy Sky Deutschland and Sky Italia from 21st Century Fox for £4.9 billion.

BSkyB has entered into agreements with 21st Century Fox to acquire the company’s 100% stake in Sky Italia and its 57.4% interest in Sky Deutschland. For Sky Italia, the company will pay £2.45 billion in cash and the rest of the balance through the transfer of BSkyB’s 21% stake in the National Geographic Channel, which is valued at £382 million. Acquisition of 21st Century Fox’s shareholding in Sky Deutschland will be for £2.9 billion in cash. The transactions are subject to regulatory and shareholder approval.

This sets up BSkyB to be the top pay TV provider in three of the largest markets in Europe, with a potential reach of 97 million households. Of these, 66 million have yet to take adopt pay TV.

Sky sold its 6.4% stake in ITV to Liberty Global for £481 million last week.

“This transaction will create a world-class, multinational pay TV business with enhanced headroom for growth and immediate benefits of scale,” said BSkyB chief executive, Jeremy Darroch. “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.”

James Murdoch, Co-COO of 21st Century Fox said, ““We have always believed that a combination of the European Skys would create enormous benefits for the combined business and for our shareholders…The transaction underscores our focus at 21st Century Fox on simplifying our structure while delivering significant value to our shareholders. We look forward to participating in Sky’s exciting next chapter under the leadership of Jeremy Darroch, along with the other senior leaders, colleagues and creative talent across all the European Sky businesses.”

Some have speculated that Fox CEO Rupert Murdoch could now use the cash from the BSkyB deal purchase to make a second attempt to buy US media giant Time Warner. Murdoch made Time Warner an unsolicited offer of $80 billion earlier this month.