Sky spends £5 billion to become one of Europe's biggest pay-TV operators

Matt Brian
M. Brian|07.25.14

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Sky spends £5 billion to become one of Europe's biggest pay-TV operators

Rumors of an assault on Europe have circled for quite some time, but today BSkyB has finally made a move to expand its pay-TV empire outside of the UK. The company today announced it has agreed to pay 21st Century Fox a total of £4.9 billion ($8.33 billion) to acquire Sky Italia and buy the majority share (57 percent) of Sky Deutschland. If the deal is given the green light by regulators, the newly-formed Sky Europe would emerge with almost 20 million European customers.

While the deal has been driven by BSkyB, Rupert Murdoch also stands to gain a huge amount from the takeover. He owns 21st Century Fox, which, of course, owns Sky Italia and Sky Deutschland, but also holds a 39 percent stake in BSkyB. That means the UK business is effectively buying its sister companies, adding some more cash to Murdoch's war chest ready for another crack at an $80 billion takeover of Time Warner (and HBO).

In the UK alone, Sky has seen the number of connected homes double over the past year to over 5 million. While it faces increased competition from BT and Virgin Media, it's pushed forward with on-demand offerings like Sky Go, which now counts 5.5 million registered customers, and streaming service Now TV. Sky wants replicate that success in Italy and Germany, giving the Rupert Murdoch-backed company the chance to tap new markets where combined paid TV, broadband, and streaming services aren't quite so popular.

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