SKY, Vodafone NZ abandon merger plans

26 Jun 2017

SKY Network Television and Vodafone New Zealand have abandoned their previously announced merger plans, as a result of the deal’s hostile reception from the Commerce Commission. Previously, in February this year the watchdog rejected the proposed merger, citing anti-competition fears. The following month the companies said they would appeal, but this has now been withdrawn, and the sale and purchase agreement has been terminated. Radio New Zealand quotes an internal e-mail sent by SKY chief executive John Fellet as saying: ‘Quite simply, it is estimated that the appeal could take another year and cost a million dollars – that I would rather spend on content. Then we would still need to go through another shareholder approval process which could take a further six months. One of the upsides of the merger talks with Vodafone is that our two companies have found new ways to work together that negate some of the value of the merger. Vodafone was our most valuable partner before and during the merger talks and I expect this to continue going forward.’

As previously reported by TeleGeography’s CommsUpdate, in June 2016 SKY (which is New Zealand owned and not part of the European satellite TV group of the same name) agreed to acquire all shares in Vodafone NZ for a total purchase price of NZD3.4 billion (USD2.3 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 NZD1.3 billion, to be funded through new debt. The merged SKY/Vodafone entity would have been controlled by Vodafone Group. When rejecting the deal earlier this year, Dr Mark Berry, Chair of the Commerce Commission, stated that the watchdog had outlined its concerns over the merger in October 2016 and subsequent submissions had not resolved these worries.

New Zealand, SKY Network Television, Vodafone Group, Vodafone New Zealand