BSkyB confirmed on Friday it has sealed a £10bn deal to create Sky Europe, buying its sister pay-TV companies in Germany and Italy from Rupert Murdoch’s 21st Century Fox.
BSkyB, which is 39.1% owned by Fox, is expected announce the deal as part of its annual financial results for the year to the end of June on Friday morning.
BSkyB will take full control of both Sky Deutschland, acquiring Fox’s 57% stake and buying out other shareholders, and Sky Italia.
Sky Europe is unlikely to be able to benefit from being able to strike pan-European deals for sports rights, such as the Premier League, as rights holders negotiate on a market-by-market basis. However, the enlarged business is likely to benefit from cost-cutting in shared operations, and make better use of programming investments across multiple markets.
The company’s UK and Ireland operation can reach 27m households, while Sky Europe would have a target of 94m households encompassing Germany, Italy and Austria.
The deal will net Fox as much as $10bn, which is expected to be used by Fox to make an improved offer for rival media giant Time Warner, after its earlier $75bn-plus bid was knocked back in June.