News Corp has offered A$2bn (US$2.1bn) to acquire Consolidated Media Holdings (CMH), with an eye to increasing its share in Australia’s largest pay-TV platform Foxtel.

If the all-cash bid is successful, Rupert Murdoch’s company would boost its stake in Foxtel from 25% to 50%, putting it on equal footing with current majority owner Telstra. News Corp would also acquire 100% of content producer Fox Sports.

The move follows Foxtel’s A$2bn takeover ^[1] of pay-TV rival Austar, which completed last month, creating Australia’s largest pay platform. This spelt the end of XYZ Networks, which has been merged into a new channel group, Foxtel Networks.

Today’s bid sees CMH parent Consolidated Press Holdings (CPH) offered A$3.50 a share, 12 cents more than CMH’s current trading price of A$3.38. This values CMH at US$1.97bn.

The deal needs approval from News Corp’s board, the Foreign Investment Review Board and the Australian Competition and Consumer Commission and is unlikely to be completed until the fourth quarter of this year.

The move is News Corp’s first major acquisitions activity in pay-TV after last year’s scuppered takeover of UK satcaster BSkyB, which ended in failure ^[2].

However, the company, which is registered in Delaware but is also on the Australian Stock Exchange, increased its stockholding in the Middle East’s Rotana Group, which owns free-to-air TV channels, to nearly 19% last month by paying US$35m for an extra 4.4%.

This latest move would end CMH majority owner James Packer’s dealings in the Australian media sector, apart from a 10% minority share in Network Ten. His family has had interests in Aussie media since his great-grandfather, journalist Robert Clyde Packer, invested in newspapers in the early 20th century.

James Packer stands to make about A$1bn from the deal, which he would likely use to further a move into casino ownership.

“CPH welcomes News’s proposal and looks forward to CMH and News working together to address the detailed terms and conditions,” he said. “Subject to this, CPH, considering the offer price of A$3.50 per share to be fair, will support the proposal in the absence of a superior cash offer.”

The news came as News Corp announced sweeping cuts to its Australian media assets, including most of its news divisions. However, it claimed to be committed to the Australian news industry.