Vodafone confirms NZ merger with TV operator

Vodafone confirmed local rumours surrounding its New Zealand operation, announcing it was merging with subscription television provider Sky to create an integrated telecommunications and media group.

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The FTSE 100 firm said once combined with Sky - which is unrelated to the British subscription television firm of the same name - Vodafone will be a 51% shareholder of the combined group as a result of a consideration comprising an issue of nre Sky shares and NZD 1.25bn in cash, equivalent to an enterprise value of NZD 3.44bn.

New Sky shares will be issued at NZD 5.40 per share, representing a 21% premium to Sky’s last close of NZD 4.47.

The combination is subject to the approval of at least 75% Sky shareholders, at a meeting on the proposed transaction in July.

“This is an exciting time for the rapidly evolving communications and entertainment industries,” said Vodafone New Zealand chief executive Russell Stanners.

“The merger brings together SKY's leading sports and entertainment content with our extensive mobile and fixed networks, enabling customers to enjoy their favourite shows or follow their team wherever they are.

“The combination with SKY will bring greater choice, enhanced viewing experiences and will better serve New Zealanders as demand for packaged television, internet and telecoms services increases,” Stanners explained.

Sky chief executive John Fellet said the combination was a significant and positive step in Sky’s evolution as a premium entertainment company.

“We already enjoy an excellent partnership with Vodafone, bringing together our two highly complementary businesses is in the best interests of shareholders and customers.

“The combined group will offer exciting new packages with Sky's premium entertainment content, Vodafone's communications and digital services of the future,” Fellet explained.