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Eurobites: BSkyB Agrees $9.1B M&A Deal

Ray Le Maistre
7/25/2014

Also in today's EMEA regional roundup: Europe still weighs on Vodafone revenues; EE on course for 6 million 4G customers by year's end.

  • UK entertainment and communications services giant BSkyB has struck acquisition deals with 21st Century Fox worth £5.35 billion (US$9.1 billion) that, it says, will make BSkyB the leading pay TV provider in three of Europe's four largest markets. It will acquire 100% of Sky Italia for £2.45 billion ($4.16 billion), and buy Fox's 57.4% stake in Sky Deutschland for £2.9 billion ($4.93 billion), to add to its existing core business in the UK and Ireland. Pending regulatory and shareholder approval, the resulting pan-European business will have more than 20 million customers, compared with its current 11.5 million customers. For more details, see this announcement and this Reuters article. The company also announced its results for the fiscal full year that ended June 30: Revenues grew by 6.5% to £7.6 billion ($12.9 billion) but its operating profit was down 5.3% to £1.26 billion ($2.1 billion). See this earnings release for more details.

  • Vodafone's financials are still taking a hit from a number of major European markets, where a combination of macro economic factors, intense competition and regulatory pricing rules are putting pressure on its revenues. The international operator reported group services revenues of £9.45 billion ($16.1 billion) for the quarter ending June 30, a decline of 4.2% on an "organic" basis (once currency fluctuations and M&A activities are taken into account). In Europe, the organic services decline was 7.9% but this was offset to some degree by an organic increase in revenues in India and Turkey. For more details and some analyst views, see this Reuters report. Also this week, Vodafone completed the acquisition of Spanish cable operator Ono for €7.2 billion ($9.7 billion). (See ONO Says Yes to Vodafone.)

  • EE , the UK's largest mobile operator, says it's on course to have 6 million 4G LTE customers by the end of 2014. The operator added 1.3 million new 4G customers during the second quarter to take its total to nearly 4.2 million at the end of June. The operator, which has 24.54 million mobile customers in total, reported first half revenues of £3.1 billion ($5.26 billion), down 3% from a year ago, and adjusted earnings (after one-time costs and charges) of £760 million ($1.3 billion), up 1.9%. For more, see this EE results announcement. EE is currently undertaking LTE Broadcast trials as it looks to develop a new range of next generation mobile broadband services. (See EE to Trial 4G Broadcast in Scotland.)

    — Ray Le Maistre, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, Editor-in-Chief, Light Reading

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    Gabriel Brown
    Gabriel Brown
    7/25/2014 | 12:29:06 PM
    EE 4G Subscriber Growth
    EE on the other hand added 1.3 million new 4G customers. "The best quarterly 4G performance ever by a European operator," it says.
    Gabriel Brown
    Gabriel Brown
    7/25/2014 | 12:23:01 PM
    Vodafone and the European Mobile Sector
    The Vodafone investor call this morning was really pretty downbeat. I've listened to a lot of these calls over the years (Vodafone is a good proxy for the European mobile sector) and can't remember one that was so lacking in punch... ironically when, for the first time in YEARS, the company is investing proper money in its networks.

    And Colao is clearly not prepared to call a bottom in the market despite "encouraging signs of stabilization" etc. The headwinds are still pretty strong.

    The European strategy appears to be to turn the company into a combined fixed-mobile communication provider, but it has such as scattered set of assets and technologies that you have to squint pretty hard to see how it all fits together.

    Anyway, the share is up 2% today.

     

     
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