Comcast Corp. triumphed over the Walt Disney Co. in a hard-fought battle for Sky television by offering $39 billion for the satellite-TV service that has 23 million customers in five European countries.
Philadelphia-based Comcast won an auction conducted Saturday by British regulators. Britain's Takeover Panel announced the results in London after three rounds of sealed bids. It was the first time in a decade that the London-based regulatory body presided over a corporate auction.
Sky's independent board members must approve the winning bid of $22.75 a share, and shareholders must ratify the deal before the sale will be complete.
Fox, which handled the bidding for Disney, offered $35 billion _ or $20.63 a share.
Winning Sky is a huge boost for Comcast and its CEO, Brian Roberts. His company, which started as a small Tupelo, Miss., cable system a half-century ago, has steadily grown through acquisitions and should soon have more than 50 million customers worldwide. Soon, Comcast will have a presence in some of the most prosperous countries in Europe _ Britain, Ireland, Germany, Austria and Italy.
Traditional media companies, including Comcast, have been working to fortify their businesses as they face the existential threat posed by video streaming businesses such as Netflix and Amazon.com. In addition to its satellite TV service, Sky offers a video streaming option called Now TV, which has about 2 million subscribers. It also provides broadband internet and cellphone service.
The Sky victory is a relief for Roberts, who was twice spurned by Rupert Murdoch when Roberts tried to buy much of 21st Century Fox. Instead, Murdoch made it clear that he wanted most of his entertainment empire to go to Burbank-based Disney.
Comcast's repeated overtures forced Disney CEO Bob Iger to spend nearly $18 billion more than he initially planned, or $71.3 billion, to purchase the Fox assets. Iger, however, succeeded in driving up the price that Comcast will pay for Sky.
Comcast in February offered $32 billion for Sky, but Fox _ which handled the bidding on behalf of Disney _ came back with a counteroffer. Comcast quickly raised its bid to $34 billion. Because neither side would surrender, the British Takeover Panel stepped in and established the rules for Saturday's bidding.
Sky shareholders benefited from the intense interest of the two U.S.-based media companies eager to expand their international business. Just a few years ago, Sky was valued at roughly half the amount that Comcast ultimately agreed to pay.
The sale of Sky to Comcast ends Murdoch's broadcasting ambitions in Britain. Murdoch co-founded the satellite TV service in 1989 to compete with the British Broadcasting Corp., and Sky grew into a popular service with original programming and popular soccer matches. Just two years ago, Murdoch's 21st Century Fox, which already owns 39 percent of Sky, was gearing up to buy the remaining stake in the pay-TV company to fortify its base in Britain.
Nearly a decade ago, the Murdoch company tried to buy all of Sky but, in 2011, it was forced to retreat amid an embarrassing cellphone hacking scandal at its now-defunct London tabloid, News of the World. Then, in December 2016, Fox tried again to buy the 61 percent of Sky that it currently does not own. But that sale became bogged down as various regulators in Britain chewed on the deal and raised questions about Murdoch's control.
The Australian-born media magnate has long been influential in British politics, and he is not popular with the Labour Party. Activists complained that Murdoch already has too much sway over Britain's media because the family's publishing company, News Corp., controls several newspapers.
During the regulatory slog, Murdoch last year decided to unload much of his U.S.-based Fox businesses. Among them: the prolific 20th Century Fox television and movie studios, cable channel FX, regional sports networks and its stakes in Sky and the streaming service Hulu. The Murdochs will keep Fox News Channel, national sports networks and television stations.
When the Fox-Disney transaction is complete, probably next year, Disney will take over Fox's current 39 percent stake in Sky. Analysts then expect Disney to sell its stake to Comcast, a factor that probably played a part in Disney's strategy to spur along the bidding for Sky.
Sky is one of the most popular TV brands in Europe. Last year, the satellite TV broadcaster produced $18.5 billion in revenue. It creates its own programs, runs the popular Sky News channel and maintains exclusive partnerships in Europe with HBO, Showtime and Warner Bros. studio. Showcasing the top sports has long been essential to Sky's success, and it is heading into a three-year deal with English Premier League of soccer that begins next year.
Roberts was determined to buy Sky, which contributed to his decision to withdraw Comcast's offer for the Fox businesses in July, ceding that contest to Disney.
"We have admired Sky for a long time," Roberts told investors in London in February. "We intend to build on the wonderful platform that Sky has (in Britain) to grow our businesses in the future."
