Broadcaster BSkyB secures £5.3bn European deal

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BSkyB bolstered its pay-TV empire with the £5.3bn takeover of sister companies in Italy and Germany.

The broadcaster’s deal with 21st Century Fox, which is controlled by tycoon Rupert Murdoch, will see it buy all of Sky Italia for £2.45bn and take a 57.4 per cent interest in Sky Deutschland for £2.9bn.

The enlarged company will serve 20 million customers and combines the leading pay TV businesses in three of Europe’s four biggest markets.

The proceeds will boost 21st Century Fox in its pursuit of Time Warner after it failed with an offer worth 80 billion US dollars (£47bn) earlier this month. Twenty-First Century Fox, which will continue to own 39 per cent of BSkyB, includes Fox News and the Fox network behind The Simpsons and Family Guy, as well as Hollywood studio 20th Century Fox, maker of the X-Men and Ice Age films. The company was formed after Mr Murdoch split it away from the News Corp publishing firm, which controls The Sun, The Times and The Sunday Times, as well as the Wall Street Journal and New York Post.

BSkyB’s European expansion was announced at the same time as it said annual operating profits dropped five per cent to £1.26bn due to investments in connected TV services and Premier League football rights.

It ended the year with 11.5 million customers, an increase of 342,000 over the year and 75,000 in the quarter. The company said it added a third more customers than in the previous year, its highest rate of growth in three years. The company will also make an offer for the remaining shares in Sky Deutschland, bringing the total deal price to around £7bn.

It believes that there is significant room for growth in the two countries as take-up of pay-TV services by households is much less advanced than in the UK and Ireland, where there is 53 per cent penetration. BSkyB chief executive Jeremy Darroch said: “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.”

Stephen Blake of the CMA  Photo: Vikki Ellis

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