BSkyB in talks to unite Murdoch's pay-TV businesses in Europe
By Paul Sandle and Maria Sheahan
LONDON/FRANKFURT (Reuters) - Britain's largest pay-TV company BSkyB is in talks to buy Sky Deutschland and Sky Italia, a 10 billion euro deal that would realize Rupert Murdoch's long-held ambition to combine his European TV interests in a single business.
The potential tie-up would create a broadcaster with 20 million subscribers and more clout to deal with growing competition from rivals such as BT in sport as well as online groups like Netflix in movies and blockbuster TV shows.
In 2010, Murdoch had already tried to take full control of BSkyB, the jewel in the crown of his European operations, but the bid was thwarted by repercussions of a phone hacking scandal involving his British tabloid News of the World in 2011.
Murdoch, whose 21st Century Fox is BSkyB's biggest shareholder, has looked at various options over the years to consolidate his TV holdings in Europe.
The latest proposal would see BSkyB, 39 percent owned by 21st Century Fox, buy Sky Italia and Sky Deutschland, which are 100 percent and about 55 percent owned by Fox, respectively.
British regulators would likely want to examine any deal that would result in Murdoch increasing his overall stake in BSkyB. A source close to the talks said the current thinking was that Murdoch would not raise his stake in BSkyB above 39 percent.
BSkyB said talks were still preliminary and no agreement had been reached on terms, value or transaction structure.
"BSkyB believes at the right value, this combination would have the potential to create a world-class multinational pay TV group," the group said in a statement on Monday. Continued...