RTL Group is to acquire Sky Deutschland for €150m.
RTL will take over Sky’s operations in Germany, Austria and Switzerland, combining Sky’s sports rights – including Bundesliga, Premier League and Formula 1 – with RTL’s entertainment and news brands in the region across RTL+, free-to-air and pay TV.
The deal also unites the two companies’ streaming offers in the German-speaking market, RTL+ and Sky’s WOW, which have 11.5 million paying subscribers between them.
The deal comes as RTL, which owns the Fremantle production and distribution group, seeks to grow its streaming offer in the face of stiff competition from Netflix and Prime Video in the German-speaking market.
RTL said it is paying €150m in cash and a variable consideration linked to RTL Group’s share price performance. This can be triggered by Comcast, Sky’s parent company, at any time within five years after closing, provided that RTL Group’s share price exceeds €41, and is capped at €377m.
The transaction, which has been approved by RTL’s board of directors, is subject to regulatory approvals.
Thomas Rabe, CEO of RTL Group, said: “The combination of RTL and Sky is transformational for RTL Group. It will bring together two of the most powerful entertainment and sports brands in Europe and create a unique video proposition across free TV, pay TV and streaming. It will boost our streaming business, with a total of around 11.5 million paying subscribers, further diversify our revenue streams and make us even more attractive for creative talent, rights holders and business partners.”
Rabe said the deal would lead to estimated synergies of around €250m per annum within three years after closing, creating significant shareholder value.
RTL will have the right to use the Sky brand in the DACH region (Germany, Austria, Switzerland), Luxembourg, Liechtenstein and South Tyrol.
Barny Mills, Sky Deutschland CEO, will continue to lead the Sky Deutschland business until the transaction is completed. Stephan Schmitter will stay in his current role as CEO of RTL Deutschland until closing of the transaction and then lead the combined company.
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