Vodafone Group will merge its New Zealand operations with the country’s largest paid-TV provider Sky Network Television, to create “a leading integrated telecommunications and media group in New Zealand”.
Russell Stanners, chief executive of Vodafone NZ, said: “The merger brings together Sky’s leading sports and entertainment content with our extensive mobile and fixed networks, enabling customers to enjoy their favourite shows or follow their team wherever they are.”
Vodafone is the largest mobile operator in New Zealand, with a 40 per cent market share and 2.4 million customers.
Sky will pay NZD1.25 billion in cash, to be funded through new debt, and the rest in new Sky shares. Vodafone will own 51% in the new combined entity. Stanners will head the new business.
Sky shareholders are expected to meet in July to vote on the proposed transaction. The deal is subject to regulatory clearance, the firms said.
The new company is expected to deliver cost, capex and revenue synergies with a net present value of approximately NZD850 million.
The merger comes at a time when Sky faces increasing competition from online media streaming services like Netflix, which has been expanding aggressively across Asia Pacific.