Published: Sun, September 23, 2018
Markets | By Otis Pena

Comcast Muscles Fox Aside With $39 Billion Offer for Sky

Comcast Muscles Fox Aside With $39 Billion Offer for Sky

Comcast bid highest in a quick-fire auction of Sky, dealing Rupert Murdoch's 21st Century Fox a potential knock-out blow in their battle for Europe's largest satellite broadcaster.

The firm's chairman and chief executive said it was "a great day for Comcast".

'Sky is a wonderful company with a great platform, tremendous brand and accomplished management team.

"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's repeated overtures forced Disney Chief Executive Bob Iger to spend almost $18 billion more than he initially planned, or $71.3 billion, to purchase the Fox assets.

Sky has recommended that its shareholders accept Comcast's blockbuster $39 billion bid for the company, an offer hailed by chief executive Jeremy Darroch as "the beginning of the next exciting chapter for Sky".

USA cable giant Comcast bid 17.28 pounds a share for control of London-listed Sky, bettering a 15.67 pounds a share offer by Fox, the Takeover Panel said in a statement shortly after final bids were made on Saturday. But with help from Fox, Iger succeeded in driving up the price that Comcast ended up paying for Sky.

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Comcast operates a more integrated model in the U.S. which includes cable broadband, telephony and free to air television along certain parts of the East Coast.

Sky shareholders must now decide whether to sell their shares to Comcast. The predominantly United States business is in decline - Sky offers it the opportunity to diversify outside of America.

"Consumers are no longer buying whole cable packages but are rather going for 'skinny bundles" with SVODs (subscription video on demand) such as Netflix, which offer content at a lower price point; acquiring Sky means that Comcast can also diversify its route to market'.

Just three British takeovers have been settled at an auction since 2007, including the sale of steelmaker Corus to Tata for £6.2bn in 2007.

But it marked a fitting end to a fascinating takeover, which has taken many twists and turns since Fox first made its original £11.7 billion bid in December 2016.

The process began when Mr Murdoch's News Corp company put forward a bid for full control of what was then BSkyB.

Comcast bowed out of the fight with Disney to buy those 21st Century Fox assets but will now take Sky TV. While Comcast acquired NBCUniversal and DreamWorks Animation over the past decade, it failed in attempts to buy Disney in 2004, Time Warner Cable 2015 and Fox in July.

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