Rupert Murdoch is a step closer to consolidating his European satellite properties, creating the continent’s largest pay TV company. The European Commission said today it will not raise antitrust objections to the $9B effort by BSkyB, the UK satellite company that’s 39% controlled by Fox, to buy Murdoch-owned satellite properties in Germany (Sky Deutschland) and Italy (Sky Italia). The deals “would not raise competitive concerns, since the activities of the three companies are geographically complementary,” the EC said. Each serves a distinct national market. BSkyB also would not have excessive power in bidding for premium content, including sports and films, the regulatory body concluded. Most rights holders “have not accepted the practice of multi-territorial licensing to any meaningful extent.” And if that changed, BSkyB would “face competition for multi-territory rights from a number of multinational groups.”
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The deals still need to be approved by shareholders. If they support it, the combined group would have 20M subscribers in Europe across three of the four biggest markets. BSkyB would pay £2.07B ($3.37B) for Sky Italia and £2.9B ($4.72B) for Deutschland. It also would transfer its 21% ownership of National Geographic Channel to Fox at a value of £382M ($621.1M), raising Fox’s stake in the channel to 73%. BSkyB says it also would launch a voluntary cash offer to the remaining shareholders of Sky Deutschland at €6.75 ($10.98) per share.
“We have always believed that a combination of the European Skys would create enormous benefits for the combined business and for our shareholders,” Fox co-COO James Murdoch said in July when the deals were announced. “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.”
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