Murdoch's Fox agrees $14.6 billion Sky deal to expand empire

Thu Dec 15, 2016 12:09pm EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Kate Holton and Paul Sandle

LONDON (Reuters) - Rupert Murdoch's Twenty-First Century Fox (FOXA.O: Quote) has struck a $14.6 billion deal to buy European pay-TV firm Sky (SKYB.L: Quote) that unites a media empire across two continents and helps it take on rivals like Netflix (NFLX.O: Quote) in the battle for viewers.

Fox said it would pay 10.75 pounds per share - or 11.7 billion pounds - for the 61 percent of Sky it does not already own to control a business with 22 million customers in Britain, Ireland, Italy, Germany and Austria.

People familiar with the matter told Reuters the American media corporation 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.

The Murdoch family have never wavered in their ambition to take full control of Sky, despite the damaging failure of a previous attempt five years ago when their British newspaper business became embroiled in a phone-hacking scandal.

The agreement comes just over a week after Fox first approached Sky and follows several days of haggling in London which resulted in Fox lifting its offer three times to secure the backing of Sky's independent directors, according to two people familiar with the situation. The deal values all of the company at 18.5 billion pounds.

James Murdoch, the chief executive of Fox and chairman of Sky, said the British-based company had led the way in delivering premium content like English Premier League soccer and the "Game of Thrones" fantasy drama across multiple platforms including satellite, broadband and mobile.

"Sky is much more than a satellite distribution company, it's a creative, commercial and consumer powerhouse," the son of 85-year-old business patriarch Rupert told analysts on a call.

The deal is the latest one to marry distribution with content after AT&T Inc (T.N: Quote) announced an $85 billion bid to buy Time Warner Inc (TWX.N: Quote) earlier this year.   Continued...

Rupert Murdoch, News Corp. and 21st Century Fox CEO, speaks during the annual Lowy Lecture at the Sydney Town Hall October 31, 2013.   REUTERS/David Gray/File photo