Sky has confirmed plans to buy its Italian and German namesakes from 21st Century Fox which owns 39% of the UK pay-TV giant.
The £4.9 billion deal will see Sky acquire Fox’s 100% stake in Sky Italia and its 57.4% controlling interest in Sky Deutschland. It’s also seeking to buy out Sky Deutschland’s minority shareholders.
Sky will pay a total of £2.45 billion for the Italian company, with 2.07 billion to be paid in cash and the balance to be satisfied through the transfer of BSkyB’s 21% stake in National Geographic Channel International to 21st Century Fox.
Fox’s shareholding in Sky Deutschland is valued at £2.9 billion which will be paid in cash.
Both transactions are subject to regulatory and shareholder approval.
New subscriptions to the firm’s existing UK business have slowed in recent years and the acquisition of two operators in countries with far lower take-up of pay-TV is expected to help maintain growth.
Jeremy Darroch, BSkyB’s Chief Executive, said: “This transaction will create a world-class, multinational pay TV business with enhanced headroom for growth and immediate benefits of scale.
“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, grow faster and enhance returns.”
Confirmation of the long-rumoured acquisitions came as the firm announced fall in operating profit from £1.33bn in 2012/13 to £1.26bn in 2013/14.
Sky said this was a “an excellent result in a period where the business absorbed a one-off step up in Premier League costs and invested to accelerate take-up and usage of new connected TV services.”
Overall revenues were up 7% over the year and the firm added 264,000 TV customers, including sign-ups to its cheaper, contract-free NOW TV service, and grew the number of paid-for products per customers from 2.8 last year to 3.0.
More than half of the company’s TV customers have connected their set top boxes to the internet and can now enjoy on demand films and TV boxsets.