Aussie pay TV partners Foxtel and Austar have finally agreed the terms of a merger worth over $A2 billion ($2.1 billion).
The deal, which has taken several months to negotiate, aims to give the two companies — who have long been partners — better synergies and stronger subscriber growth. It also means the feevee business can turn its focus to battling the free-to-air webs, and their recently added suite of digital channels, which have taken the shine off the feevee market.
The deal prices Austar shares at $1.62 each; they were $1.37 at the close of trading Monday, before the merger was announced.
“A merged Foxtel and Austar would make compelling strategic sense, and it would continue to invest and innovate in a superb digital service for consumers across Australia, including investing heavily in marvellous new original Australian content,” Foxtel’s topper, Kim Williams, said in a statement.
Foxtel’s focus is on the major Aussie cities, while Austar services rural clients, and the merged entity hopes to save money on operational double-up, Austar has advised its shareholders to accept the deal.
Telco Telstra owns 50% of Foxtel, while Rupert Murdoch’s News Corp., and James Packer and Kerry Stoke’s Consolidated Media each have 25%.