Published: Sun, September 23, 2018
Economy | By

Comcast buys Sky, beating out Fox

Comcast buys Sky, beating out Fox

Critics had argued that allowing Murdoch - who owns major British newspaper titles The Times and The Sun - full control of Sky News would have given him too much influence in the United Kingdom news business.

Britain's regulator, the Takeover Panel, set up the auction to reduce uncertainty for Sky after months of offers and counteroffers from the American media giants.

USA cable giant Comcast has submitted the highest bid in the auction for broadcaster Sky, valuing the company at more than £30 billion ($NZ58b).

"Sky is a wonderful company with a great platform, tremendous brand and accomplished management team", he said in a statement.

'This acquisition will allow us to quickly, efficiently and meaningfully increase our customer base and expand internationally. Then the Sky board will make a recommendation, and Sky shareholders have until October 11 to vote.

Comcast's final offer values Sky at around 29.7 billion pounds (about $39 billion). Rival 21st Century Fox offered $US20.47 per share.

The payout for Murdoch's Fox would amount to 11.6 billion pounds if it tenders to Comcast, some consolation for his second failed attempt to grab the rest of the United Kingdom broadcaster.

Comcast's holdings already include Universal Studios and the USA television channels NBC and CNBC. With the Sky takeover, Comcast will become the biggest pay TV provider in the world, with around 52 million customers after adding Sky's 23 million subscribers.

A decision later today will put to rest a long-awaited bidding process which has seen Sky receive a flurry of investment from U.S. giants looking to strengthen their markets against disruptors such as Netflix and Amazon.

Pivotal Research Group's Brian Wieser said in a note it was likely Disney would sell the minority stake in Sky it would own following the Fox deal.

"Consumers are no longer buying whole cable packages but are rather going for 'skinny bundles" with SVODs (subscription video on demand) such as Netflix, which offer content at a lower price point; acquiring Sky means that Comcast can also diversify its route to market'. The Takeover Panel will unveil the victor this evening.

A bidding war emerged last December, when Comcast made an offer for Fox's entertainment assets, which Walt Disney is in the process of buying for about US$71 billion.

Disney would "have to take as a consolation prize that Fox's position in Sky will end up worth much more than when Disney originally agreed to buy it", meaning selling the stake will free up extra capital.

Fox had always been trying to acquire the 61 per cent of Sky it doesn't already own.

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