21st Century Fox will sell its Italian and...
21st Century Fox will sell its Italian and German assets to British Sky Broadcasting for more than $9 billion. BSkyB will pay nearly $5 billion for Sky Deutschland and pay cash and its stake in National Geographic Channel for Sky…
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Italia, BSkyB said Friday in a news release (http://bit.ly/UwYWVl). The deal comes a few weeks after 21st Century Fox announced that Time Warner declined its $80 billion takeover offer (CD July 17 p12). As part of the deal, 21st Century Fox will buy about $900 million in additional shares in BSkyB to maintain the company’s 39.14 percent ownership interest, 21st Century Fox said in a news release (http://bit.ly/1mNzfqn). BSkyB expects the transaction to result in significant growth opportunities and increased scale “from day one,” BSkyB CEO Jeremy Darroch said Friday during a webcast. BSkyB will create a world class multinational pay-TV business, and allow BSkyB to offer customers more choice and more content, he said. The three businesses are highly complementary and BSkyB will benefit from more significant revenue growth, he said. The purchase will help transform headroom of BSkyB’s pay-TV growth from 14 million households to 66 million households “out of a total of 97 million addressable homes,” Darroch said. The company will be Europe’s biggest investor in content and deploy an annual programming budget of more than $7 billion, he said. BSkyB will continue look to open up new sources of revenue based on models in its existing business, which could include replicating some of its Connected TV services, like Now TV, he said. The enlarged company will likely be able to reduce costs by sharing programming and channel brands, and by being more effective in the production of live cross-border events like Formula 1 racing, said Andrew Griffith, chief financial officer. The transaction doesn’t require U.K. regulatory approvals, and the deal is expected to close by November, he said. BSkyB revenue grew about 6.5 percent to more than $12 billion in the year ended June 30, it said in the release. It added more than 260,000 customers, and HD growth was driven by the expansion of set-top box sales as customers trade off to high-tier packages, Darroch said.