The Low Post News

BSkyB Negotiating to Purchase Pay-TV of Fox in Italy and Germany

Rupert Murdoch is after a business deal that would transform the British Sky Broadcasting Group or BSkyB, into a satellite-TV behemoth in Europe, while also leaving his 21 Century Fox Inc, based in the United States, focused on other programming.

Fox owns 39% of BSkyB and today said it is negotiating to purchase the German and Italian pay-TV assets owned by Fox. The deal, for control of Sky Italia as well as Sky Deutschland AG, both satellite carriers, would have a value of more than $14 billion, said those people close to the matter.

Fox currently has 100% ownership of Sky Italia and 57% of Sky Deutschland.

The deal would make BSkyB, the biggest provider of pay-TV already in the UK, the overseer of businesses that sell programming for satellite to more than 8.5 million homes in Italy and Germany.

By selling off the units of pay-TV, Fox would have its broadcast and cable networks as well as its TV and movie studios that would make it a more attractive object for investors that want solely video production without any distribution.

On the news, shares of Sky Deutschland were up by 8%. The shares had dropped by 21% in 2014 through the close of business on May 9. BSkyB shares were down by 2.5% on the news, giving the business a market capitalization of $23 billion.

The current talks remain in the preliminary stage, with no agreement reached on any terms, transaction or value structure. It is not certain that the deal would occur said a representative from BSkyB.

BSkyB said it had initiated the negotiations with Fox. For months, the two companies have had talks and now there could be a deal announced during the summer, said those people close to the situation.

Fox previously had sought full control of BSkyB but was forced from its pursuit of that in 2011 amidst the opposition politically, following allegations that UK newspaper journalists at the papers owned by Murdoch hacked into the phones of celebrities and had bribed police officers.

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