Wednesday , 17 December 2025

Vodafone NZ grabs Sky in US$2.4 billion merger deal

epa03392120 (FILE) A pedestrian passes a Vodafone store in London, Britain, 10 November 2009. A New Zealand court on 10 September 2012 ordered Vodafone Plc to pay a record amount of fines for breaking fair trading laws. An Auckland District Court judge fined the London-based multinational firm 960,000 New Zealand dollars (780,000 US dollars) after it admitted breaching the Fair Trading Act. The charges related to two mobile broadband marketing campaigns that falsely claimed its service was available everywhere and that its network was the largest in New Zealand. The ruling followed fines of nearly 500,000 New Zealand dollars (406,000 US dollars) imposed in 2011 for six other charges mainly relating to Vodafone's mobile internet services. The Commerce Commission said the total penalties were a record for a single defendant under New Zealand's fair trading laws. EPA/ANDY RAIN

 

Wellington / Bloomberg

Vodafone Group Plc’s New Zealand business and the country’s largest pay-television provider, Sky Network Television Ltd., agreed to a NZ$3.44 billion ($2.4 billion) merger as they grapple with increasing competition.
The global mobile-phone operator will own 51 percent of the combined entity, the companies said in a joint statement Thursday. Sky Network is issuing new stock to the Newbury, England-based company.
Vodafone’s New Zealand customers and revenue have barely risen in the past two years while Sky Network’s earnings are falling, filings showed Thursday. The pay-television leader is facing competition from Internet entertainment companies such as Netflix Inc. and a domestic offering, Lightbox, from Spark New Zealand Ltd.
Sky Network hasn’t done enough to deal with the threat and a union with Vodafone gives the pair more scope to sell each other’s products, according to Fat Prophets.
“They’re probably waking up and smelling the coffee,” said Greg Smith, head of research at Fat Prophets. “Sky has certainly been pressured into doing this. Combining with Vodafone is going to be quite a powerful combination.”
Shares Surge
Sky Network’s shares surged 17% to NZ$5.25 at the close in Wellington. Vodafone stock declined 3.9 percent to 222.10 pence at 8:10 a.m. in London.
Under the terms of the union, Vodafone will buy new shares in Sky Network for NZ$5.40 apiece, 21 percent more than the stock’s previous closing price.
Sky Network will also pay NZ$1.25 billion in cash. The combined group has an enterprise value of NZ$3.44 billion, according to Thursday’s statement.
Rupert Murdoch’s News Corp. sold its 44 percent stake in Sky Network in 2013 as the media company prepared to split its publishing and entertainment units. Vodafone NZ Chief Executive Officer Russell Stanners will be CEO of the combined group, while Sky Network Chairman Peter Macourt will be its chairman. Sky Network was advised by Citigroup, while Deutsche Bank AG and Deutsche Craigs advised Vodafone.
The deal brings together New Zealand’s No. 1 cell phone provider, with more than 2.35 million mobile connections, and a pay-TV operator with 830,000 subscribers. The new company, which will be a unit of Vodafone, is forecasting pro-forma revenue of NZ$2.9 billion and underlying pre-tax earnings of NZ$786 million in the year to June 30, 2017, according to the statement.

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