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BSkyB Euro merger gathers pace

UK satcaster BSkyB’s plans to create a pan-European pay TV business could result in a cash boost of around €8.5bn (US$11.5bn) for US entertainment giant 21st Century Fox.

BSkyB is currently bidding to buy out 21st Century Fox’s interests in its sister operations in Germany and Italy, to bring all its European businesses together.

Rupert Murdoch’s 21st Century Fox owns stakes in all three companies, including 39% of BSkyB.

The proposed merger would see the UK pay TV outfit acquire 21st Century Fox’s 57% stake in Sky Deutschland, valued at €3.5bn, before taking over the remainder. Sky Italia is owned entirely by Fox and has an estimated worth of between €3bn and €5bn.

BSkyB is closing in on the deal and has hired the investment banks Morgan Stanley and Barclays to assist in the complex transaction, according to one of Murdoch’s UK newspapers, The Sunday Times.

The potential merger would effectively create ‘Sky Europe,’ allowing the media giant to bid for pan-European rights to sports, series and movies.

Sky has come under pressure from SVoD services Netflix and Amazon for film rights across Europe and from pay TV rival BT for live sports rights in the UK. The deal would give it more power in those bidding wars.

In February, BT spent £897m (US$1.4bn) to snatch the coveted rights to live Champions League football’s 2015/16 season away from Sky.

However, regulators may oppose the deal on the grounds that it will give BSkyB too much power in the European market.

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