New Zealand’s mobile market leader Vodafone NZ is to merge with local pay-TV operator Sky Network Television. Sky, which is New Zealand owned and not part of the European satellite TV group of the same name, says it is looking to create a ‘leading integrated telecommunications and media group’ which will offer ‘New Zealand’s best entertainment content across all platforms and devices in a rapidly evolving media and telecommunications market’. Sky will acquire all of the shares in Vodafone NZ for a total purchase price of NZD3.437 billion (USD2.33 billion) through the issue of new Sky shares – giving UK-based Vodafone Group a 51% interest in the merged company – plus a cash consideration of NZD1.250 billion, to be funded through new debt. The combined group is expected to deliver cost, capital expenditure and revenue synergies with a net present value of approximately NZD850 million.
Vodafone NZ is New Zealand’s leading cellco and number two broadband provider, with over 2.35 million mobile connections and more than 500,000 fixed line customers, while Sky is the country’s largest pay-TV operator, with over 830,000 subscribers. Vodafone recently announced the completion of its rollout of wireless broadband networks under the government-backed Rural Broadband Initiative (RBI), with 154 new cell sites deployed under the NZD300 million scheme.