Vodafone has agreed to enter into a partnership with Sky Network Television, thereby creating the largest integrated telecoms and media group in New Zealand.
Under the terms of agreement between the two parties, Sky will buy Vodafone’s New Zealand operation for a total of NZ$3,437 million (€2,113 million), of which NZ1,250 million will be in cash, to be funded by new debt, with the rest in new Sky shares.
Following completion of the deal, Vodafone will become a 51% shareholder in the new combined entity.
In its observations about the deal, Reuters says that it should help Sky, already the leading pay-TV operator in the country, compete more effectively with Netflix.
It also quotes analysts as saying it could mark the start of Vodafone’s exit from New Zealand, with Australia soon likely to follow.
In their view, the company would then be able to focus on more profitable markets in Asia.
Competition clearance is voluntary in New Zealand and the country’s Commerce Commission is waiting to see if it receives applications from Sky or Vodafone.
Sky shareholders will meet in early July to vote on the proposed deal.
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