Comcast bags Sky for $40 billion, outbids Disney, Fox

Sergio Cunningham
September 23, 2018

Yesterday saw Murdoch's Fox, and U.S. cable-TV giant Comcast, counter-bidding.

Comcast is battling it out with Rupert Murdoch's 21st Century Fox and its powerful soon-to-be owner Disney in a rare auction, which includes up to three rounds of bidding created to culminate in two final offers for Europe's biggest pay-TV broadcaster.

The Sky victory is a relief for Comcast's Chief Executive, Brian Roberts, who was twice spurned Murdoch when Roberts tried to buy much of 21st Century Fox.

"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".

"We couldn't be more excited by the opportunities in front of us".

Comcast, which also owns the NBC network and movie studio Universal Pictures, encouraged Sky shareholders to accept its offer. Comcast offered $22.57 a share, a $2 premium over Fox's $20.46 bid.

It effectively means Rupert Murdoch has failed for a second time to gain full control of the pay-TV giant.

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"Adding Sky to the Comcast family of businesses will increase our worldwide revenues from 9 percent to 25 percent of company revenues".

Philadelphia-based Comcast is one of the largest cable television providers in the US. With Sky, the Philadelphia-based company would deliver TV services to 52 million customers in the USA as well as European countries such as UK, Italy and Germany, and add sought-after programming such as the rights to Premier League English soccer.

Thanks to the growth of Netflix and Amazon that are also rapidly spreading their tentacles offshore, the deckchairs on the United States media titanic will continue to move around. The predominantly United States business is in decline - Sky offers it the opportunity to diversify outside of America. It has 23 million customers and leading positions in the U.K., Italy and Germany.

'Furthermore, Comcast's current viewership is in decline.

Fox had always been trying to acquire the 61 per cent of Sky it doesn't already own. Fox first agreed to take control of the broadcaster in December 2016 but its takeover was held up by intense regulatory scrutiny in the UK.

The consolidation among the large United States media companies this year will see Murdoch retreat from a significant part of the market, and Disney pick up 21st Century Fox assets including the movie studio 20th Century Fox, the company's TV production arm 20th Century Fox Television, Fox-owned cable networks (including FX and National Geographic), and a controlling stake in video streaming operator Hulu.

British regulators organised the auction in part to ensure that Sky's value didn't erode during the long bidding process.

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