21st Century Fox Inc., owned by Australian media magnate Rupert Murdoch sells pay-TV units in Italy and Germany for 4.9 billion pounds ($8.3 billion) to British British Sky Broadcasting Group Plc (BSkyB). BSkyB, 39% owned by Fox, will acquire 100% of Sky Italia unit and 57.4% stake in Sky Deutschland, BSkyB press release informed.
Murdoch sells pay TV in Italy and Germany for $8.3 billion
The British company will pay 2.1 billion pounds to Sky Italia, as well as give BSkyB Fox owned of 21% stake in National Geographic Channel International. Share in Sky Deutschland will be sold to a British company for 2.9 billion pounds.
The transaction requires the approval of BSkyB independent shareholders and regulators. Buying of Fox Italian and German assets allows BSkyB to take a leading position in the pay-TV in three of the four major European markets, combined company will serve about 20 million customers.
Net proceeds from the sale of Fox assets amount to $7.2 billion, Bloomberg agency informed. These funds Rupert Murdoch can use to improve an offer to buy Time Warner Inc. The first offer of Fox, evaluated the Time Warner at $85 per share, or $75 billion, was rejected by the company.
After the announcement of planned takeover in the New York Times, Time Warner shares before the market open jumped by 22.5% to $87. It is assumed that Time Warner rejected the proposal because the part that Fox offered to pay in shares, consisted of non-voting securities.
To remove the possible objections of antitrust authorities, Murdoch offered to sell CNN after Time Warner purchase. New York Times also suggests that Murdoch is unlikely to accept a negative response and will continue its attempts to buy rival – although officially 21st Century Fox said that currently there are no discussions with Time Warner.
Fox estimated the savings from the merger of two companies of the $1 billion or more, mainly due to the reduction of sales and back offices. Revenues of the combined company could reach $60 billion.