Australian billionaire businessman and media mogul, Rupert Murdoch has further consolidated his empire in Europe with the successful acquisition of European pay-TV firm Sky, sticking to its earlier offer despite complaints from some investors.
On Thursday, Murdoch’s 21st Century Fox announced that it was purchasing Sky TV for $14.6billion. Fox said it would pursue a Scheme of Arrangement, meaning it would need the backing of 75 percent of Sky’s independent shareholders who vote to secure a deal that values Sky at 18.5 billion pounds in total.
Fox already has a 39% stake in the London-based Sky TV. However, Murdoch is buying the 61 percent of Sky he does not already own to fully acquire its 22 million customers in Britain, Ireland, Italy, Germany and Austria.
Media reports say the two firms had reached an agreement on the deal last Friday. This follows an earlier failed move by Murdoch in 2011 to purchase Sky.
Reuters says people familiar with the matter have reported that Fox pounced after Britain’s vote to leave the European Union in June sent the pound down about 15 percent against the U.S. dollar and Sky’s share price tumbling.
Shares in Sky were trading at 985 pence on Thursday.
“As the founding shareholder of Sky, we are proud to have participated in its growth and development,” Fox said in a statement.
“The enhanced capabilities of the combined company will be underpinned by a more geographically diverse and stable revenue base. This combination creates an agile organization that is equipped to better succeed in a global market.”
According to Bloomberg, Fox further said;
“The purchase creates a global leader in content creation and distribution, enhances our sports and entertainment scale, and gives us unique and leading direct-to-consumer capabilities and technologies.”
Fox pledged to keep Sky’s headquarters in London and complete a 1 billion-pound investment in the campus. The company also said it expects Sky News to maintain “its excellent record of compliance with the Ofcom Broadcasting Code.”
For Murdoch, the timing of the deal is right. Momentum behind U.S. stocks continues to build as traders bet that President-elect Donald Trump will follow through on promises to cut regulations and reduce taxes, helping to drive earnings growth. In the U.K, the pound has weakened against the dollar after the Brexit vote, which makes the acquisition cheaper for New York-based Fox.
