Sky made headlines during 2014 with the purchase of Sky Deutschland and Sky Italia in order to make a cross-Europe pay-TV giant to be renamed Sky from BSkyB. That deal ultimately cost Sky nearly £7 billion, but whilst it managed to purchase 100% of Sky Italia, they failed to get 100% of the shares of Sky Deutschland, the larger and more important of the two companies.
Sky Italia cost £2.45 billion in the purchase from 21st Century Fox, with Sky also offering their 21% share of the National Geographic Channel as part of the deal. They also purchased 21st Century Fox's 57.4% share in Sky Deutschland for £2.9 billion, or a price of £5.35 per share. Under German market rules though, any offer made to purchase a majority stake in a company must be extended to the minority shareholders too. That saw the total number of shares Sky would own in Sky Deutschland reach an amazing 89.17% as shareholders jumped at the opportunity to ditch the poorly performing Sky Deutschland stock, inflating the total cost of that purchase to £4.4 billion.
Since then, Sky have had a 'buy' order on Sky Deutschland stock, slowly accruing more stock and greater influence in the company. Today, Sky own 96% of Sky Deutschland, but the business remains on the stock market and the remaining minority shareholders must be represented on the board. It's understandable then that Sky would want to take total control of the business and remove it from the stock market, allowing greater integration with Sky UK and Sky Italia.
No surprises then when we tell you that Sky are taking the company off the German stock market, and under German market rules that means all minority shareholders will be paid in cash so that Sky will own 100% of the company. Group CEO Jeremy Darroch will address Sky's European plans at a press conference at Mip TV on Monday the 13th of April, 2015 in Cannes, France.
This decision will allow Sky to make massive savings across its business in areas like the Sky digital contact number and content, where programmes can be made and then translated into German and Italian, saving on their content budgets. It also means that Sky have backup in the battle against BT and Virgin Media and territory to lean back on in case things get a little heated in that particular battle.
With a warchest of over 20 million customers soon to be at their disposal, Sky will be able to negotiate much harder on content deals for things like Sky Movies, which will further drive savings. Indeed, if Sky can build the brand further in Germany and Italy, there's no reason at all they couldn't become one of the biggest media companies in the world. That is, if they can keep over twenty million customers happy through the Sky contact number through mobile, of course.
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