Comcast Corporation has made an offer of $31 billion to buy Sky, challenging the bid from Rupert Murdoch’s 21st Century Fox.
The offer from US cable giant Comcast is now poised crash Rupert Murdoch’s long-standing aim of full control of the Sky pay-TV group. The move that has taken the UK industry by total surprise, Comcast has lodged a cash proposal of £12.50 per Sky share for which it says represents a 16% increase in value over the existing 21st Century Fox offer. This implies an equity value of $31 billion (£22 billion) for Sky.
The acquisition is designed to enhance the entertainment, distribution and technology leadership of Comcast, and importantly expand its international footprint to more effectively compete in what it says is a rapidly changing and intensely competitive entertainment and communications landscape.
Active in the UK, Ireland, Germany, Austria, Italy, Spain and Switzerland, Sky currently serves 23 million customers in seven countries with TV and mobile communications services, and racked up $18.5 billion in 2017.
Comcast believes that adding Sky to the company’s fold would increase its international revenues from 9% to 25% of total company revenues as well as creating ‘compelling’ opportunities for growth and innovation. Comcast already has a presence in London through its NBC Universal international operations, and would maintain Sky’s UK headquarters.
“We think Sky is an outstanding company,” said Brian L. Roberts, the chairman and CEO of Comcast Corporation. “It has 23 million customers and leading positions in the U.K., Italy and Germany. Sky has been a consistent innovator in its use of technology to deliver a fantastic viewing experience and has a proud record of investment in news and programming. It has great people and a very strong and capable management team.”
Roberts added, “Comcast intends to use Sky as a platform for growth in Europe. We already have a strong presence in London through our NBC Universal international operations, and we intend to maintain Sky’s U.K. headquarters. Adding Sky to the Comcast family of businesses will increase our international revenues from 9 percent to 25 percent of company revenues.”
On 23 January the UK Competition and Markets Authority (CMA) provisionally found that Fox taking full control of Sky was not in the public interest due to media plurality concerns. In its latest move to get a full ownership big across the line and address plurality concerns 21st Century Fox was reportedly due to offer to close down its Sky News outlet. Comcast is confident that it will not face such regulatory concerns.
If Comcast is successful it is not clear where this would leave Walt Disney Company’s $52.4 billion bid to buy select 21st Century Fox TV and film assets which at the time in December 2017 included the 39% stake in satellite broadcaster Sky.
