European pay-TV giant Sky has got a formal offer from Comcast Corporation to acquire the platform at a valuing of $31 billion.
The offer from Comcast comes at a time when 21st Century Fox’s attempt to take full control of Sky got entangled in regulatory issues as the U.K. authorities are concerns about Fox exerting too much power over the British media sector.
“We are delighted to be formalizing our offer for Sky today,” said Chairman and CEO Brian Roberts. “We have long believed Sky is an outstanding company and a great fit with Comcast. Sky has a strong business, excellent customer loyalty, and a valued brand. It is led by a terrific management team who we look forward to working with to build and grow this business.
“With its 23 million retail customers, leading positions in the U.K., Italy, and Germany, and its history of strong financial performance, we see significant opportunities for growth by combining our businesses. Sky is a highly complementary business and will expand Comcast’s international footprint in the U.K. and Continental Europe. Sky will be our platform for growth across Europe. The combined customer base of approximately 52 million will allow us to invest more in original and acquired programming and more in innovation as we strive to deliver a truly differentiated customer experience. We look forward to receiving the necessary regulatory approvals.”
In order to receive regulatory clearance, Comcast has made a range of commitments, including maintaining Sky News’s annual expenditure for ten years. It will also establish a Sky News editorial board to ensure the channel’s independence, keep the U.K. headquarters in Osterley for five years and not acquire any majority interest in British newspapers for five years.
“Comcast believes that, combined, Comcast and Sky will create a business equipped to compete more effectively in a rapidly changing and highly competitive industry. Together, the companies would be well positioned to drive growth to provide attractive returns to Comcast shareholders and to benefit the employees and customers of both organizations.”
Sky shareholders would receive £12.50 in cash for each share. Comcast’s cash offer represents a 16 percent premium to the existing 21st Century Fox offer.