The European Union on Thursday approved British entertainment and communications provider British Sky Broadcasting Group plc's (BSYBY.PK,BSY.L) proposed acquisition of pay-TV companies Sky Deutschland AG (SKDTF.PK,SKDTY.PK) and Sky Italia S.r.l, noting that the deal would not raise competition concerns.
In late July, British Sky Broadcasting, known as BskyB, said it agreed to acquire 21st Century Fox's (FOXA,FOX) 100 percent stake in Italian pay-TV provider Sky Italia and its 57.4 percent interest in German pay-TV company Sky Deutschland in a deal valued at nearly $9.3 billion.
21st Century Fox said at that time that it would receive nearly $9.3 billion in combined value from BskyB. This includes about $8.6 billion cash and BSkyB's 21 percent interest in National Geographic Channels International, raising 21st Century Fox's stake to 73 percent. Upon completion of the transaction, the net cash proceeds to be received by 21st Century Fox would total about $7.2 billion.
The European Commission's executive arm, the European Commission, said in a statement on Thursday that the activities of the three companies involved in the merger are geographically complementary, and the companies are mainly active in different markets.
BSkyB's activities are mainly focused in the UK and Ireland, while Sky Deutschland's activities are mainly focused in Germany and Austria, and Sky Italia's activities are mainly focused in Italy.
The European Commission also looked into whether the merged company would enjoy increased bargaining power with regards to rights holders for the acquisition of rights to audio-visual content, particularly "premium" content, or for the acquisition of pay TV channels for its pay TV programs, to the detriment of its pay TV competitors.
However, the EC noted it was unlikely that the merged company would be able to impose a change from current licensing practices that are focused on national territories or language areas, towards the joint purchase or simultaneous negotiations for premium content across several countries.
On the London stock exchange, BSY.L closed Thursday's trading at 868.00 pence, down 8.50 pence or 0.97 percent on a volume of 2.76 million shares.
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