BSkyB Gets EU Clearance for European Pay TV Deal With Fox
The U.K. company clears one hurdle on the way to taking control of Sky Italia and Sky Deutschland
European Union regulators on Thursday approved the planned takeover by BSkyB of 21st Century Fox's pay TV operators in Germany and Italy.
Rupert Murdoch's Fox and BSkyB, in which the entertainment conglomerate owns a 39 percent stake, recently finalized a multibillion dollar deal that would give the British company control over the other two firms.
BSkyB said Thursday that it has now received "unconditional merger control clearance from the European Commission and approval from the Austrian Federal Competition Authority" for the acquisition of Sky Italia and at least the 57.4 percent of Sky Deutschland that Fox currently owns.
"Completion of the transaction remains conditional upon, amongst other things, approval of the independent shareholders of BSkyB and the receipt of relevant outstanding regulatory approvals," the company said.
The EU approval didn't come as a big surprise, with the competition authority saying that the deal "would not lead to any material overlaps in the parties' activities as they are mainly active in different national markets."
On the question of whether the merged entity would have much increased market power over content companies, the Commission said it was unlikely to change current content licensing practices in Europe, which are often focused on countries or language-based regions.
Asked by THR about content synergies, BSkyB CEO Jeremy Darroch earlier this year said the larger company would be "a great partner for all content producers around the world," but management was not assuming major savings in content costs. He signaled though that the three Sky companies would continue to develop content together under a shared roof.
The 20 million pay TV subscribers of Sky Europe, as people have dubbed the combined company, are below the number reached by John Malone's international cable operator Liberty Global, but the deal gives it increased scale to compete with it beyond a single country.
Fox said it would receive approximately $9.3 billion in value from BSkyB in the planned deal, comprised of approximately $8.6 billion in cash and a further holding in National Geographic Channels International, which will raise Fox's stake in that business to 73 percent.