Vodafone Announces $2.4 billion New Zealand Merger with Sky TV
Published on: 9th Jun 2016
Note -- this news article is more than a year old.
Vodafone's New Zealand subsidiary has announced an effective takeover of the country's main pay television operator, Sky TV in a USD2.4 billion merger.
In a complicated transaction, Sky will buy Vodafone New Zealand, paying cash and shares, but the shares element will leave Vodafone with a 51 percent stake in the merged company. In addition, a large chunk of the cash being paid is in the form of a loan, being provided by Vodafone.
Effectively, it's a reverse takeover by Vodafone.
The combined group will be one of the largest companies listed on the New Zealand stock exchange.
It's expected that the merger will lead to cost cuts of around NZ$415 million following integration of the two companies. The sources of these synergies include rationalisation of overlapping functions, utilisation of Vodafone NZ's technical and network capabilities and improvement in the efficiency of sales and marketing.
Sky Chairman Peter Macourt said "The merger with Vodafone is a transformational strategic step for our company. The transaction is also highly attractive to our shareholders. Our shares are being issued at a premium to market price and shareholders also participate in the substantial synergy benefits we expect from the transaction."
The Combined Group will be a consolidated subsidiary of Vodafone Group going forward. Vodafone's shares in the Combined Group will be escrowed (subject to lock-up restriction) until the Combined Group results are released for of FY2017 and there are restrictions on Vodafone increasing its interest in the Combined Group above 51%.