As expected, BSkyB said this morning that it will create “a world-class multinational pay TV business” with the acquisition of 100% of Sky Italia and 57.4% of Sky Deutschland. The UK’s leading pay-TV player has acquired the stakes from Rupert Murdoch‘s 21st Century Fox in a deal worth about £4.9B ($8.3B) in cash, plus assets. (Fox owns and will retain a 39% stake in BSkyB.) The combined group will have 20M subscribers in Europe across three of the four biggest markets. BSkyB will pay £2.07B for Sky Italia and £2.9B for Deutschland. It will also transfer its 21% ownership of National Geographic Channel to Fox at a value of £382M ($649M). That will raise Fox’s stake in the channel to 73%. BSkyB says it will also launch a voluntary cash offer to the remaining shareholders of Sky Deutschland at 6.75 euros ($9) per share. Subject to the number of shareholders who accept the offer, the overall cash value of the deals announced today could reach £7B ($11.9B). The moves come as BSkyB reported adjusted revenue for the year was up 7% to £7.6B ($2.9B).

The moves to create Sky Europe also come as Fox pursues a mega-acquisition of Time Warner. While speculation has been that the deal to combine the Skys was designed to raise funds for another eventual run at TW, it’s also considered that this deal has a distinct raison d’être and exists on its own merits. BSkyB is facing increased competition from BT in the UK, and has an auction for Premier League football rights coming up next year. And, the combined group also brings with it the key concept of scale. That includes inreased ability to invest in original productions and technology and better compete against the likes of Netflix and others. Signalling a further push into building a broad international content business, it acquired a 70% stake in Great British Bake Off maker Love Productions earlier this week. It also recently sold off 6.4% of ITV to Liberty Global in a deal worth $824M.

The transactions announced today are each subject to regulatory approval, but are not thought to be facing too much difficulty. Sky said today that the enlarged business will “benefit from a significantly expanded opportunity for long-term growth and value creation, with 97 million addressable households.” Out of those, about 66 million have not yet opted for pay-TV. Group revenues, BSkyB also said today, will increase from £7.6B ($12.9B) to £11.2B ($19B).

In the run-up to this deal being formally announced, some have questioned the attractiveness to shareholders. There is clear room for growth in Germany, but Sky Italia has suffered customer losses and is sat in the middle of what’s been called the most inflated market for football rights in Europe. Sky said today that the deal “provides a clear path to enhanced value creation for BSkyB shareholders. It is expected to be at least neutral to earnings per share in the second full financial year of ownership and strongly enhancing to earnings per share thereafter.” The company also expects to be able to realize £200M of “run-rate” cash synergies by the end of the second full financial year after completion, with further additional synergies expected in subsequent periods. Those are largely anticipated across the UK and Italy which have larger and more similar direct to home operations.

Former BSkyB chief and current co-COO of 21st Century Fox, James Murdoch said today, “We have always believed that a combination of the European Skys would create enormous benefits for the combined business and for our shareholders. Ultimately, a pan-European Sky is good for customers, who will benefit from the accelerated technological innovation and enhanced customer experience made possible by a fully integrated business. The transaction underscores our focus at 21st Century Fox on simplifying our structure while delivering significant value to our shareholders.”

Fox preisdent and COO Chase Carey said the transaction “significantly enhances liquidity on our balance sheet to support our key operating principles including the consistent return of capital to shareholders.” Rupert Murdoch added, “Our renewed authorization for our share buyback program will be executed regardless of any potential acquisition or investment activity by the company.” Fox’s “number one priority,” he said, “is increasing shareholder value in a disciplined manner and, as a result, we will only consider transactions that fully support this objective.”