US telecoms giant Comcast has outbid Rupert Murdock's 21st Century Fox and backer Walt Disney Co to win a deal to acquire Sky Plc, by offering a knockout sum of 29.7 billion for the broadcaster and telecoms firm.
Comcast's shares fell due to concerns that it had overpaid in its bid to keep Sky away from Disney, which would have had ultimate control over Sky had the Fox-Disney partnership outbid Comcast, as the company paid effectively double the stock valuation of Sky.
But Comcast triumphed and will use Sky to extend its corporate reach into Europe where Sky holds say as one of the main pay-TV providers. That is unless Fox refuses to tender the 39% share it has in Sky, which would mean Fox-Disney and Comcast would be forced to share ownership of Sky.
"As the price of the final Comcast Offer is materially superior, it is in the best interests of all Sky shareholders to accept the Comcast offer," a Sky said in a statement.
"Accordingly, the Independent Committee unanimously recommends that Sky shareholders accept the Comcast offer, and in order to ensure the successful closing of the Comcast offer, urges shareholders to accept immediately."
With Sky, which is comparable to Comcast in the European theatre, Comcast will not only be able to expand its customer base but will also likely help the Sky brand compete with more vigour against streaming services like Netflix and Amazon Prime Video. It could do this by being able to essentially sell video content produced by the NBC network and Universal Studios, both of which Comcast owns, directly to their customers without going through additional services or providers.
It is very early days, so there has yet to be any clear indication on what exactly the future of Sky will be, but it looks like it could benefit from having the extra clout of Comcast behind it.
