Sky Network Ltd (NZE: SKT) and Vodafone Group Plc (LSE: VOD) NASDAQ: VOD)(ADR) have announced a deal under which Sky and Vodafone’s New Zealand unit would merge, Reuters reported.

Under terms of the deal Sky would acquire all of the shares in Vodafone NZ for a total purchase price of NZ$3.437 billion ($2.44 billion) through the issue of new Sky shares, giving Vodafone Europe B.V. a 51 percent interest in the combined group and cash consideration of NZ$1.25 billion ($0.89 billion), to be funded through new debt.

The new Sky shares will be issued at NZ$5.40 per share, representing a 21 percent premium to Sky’s last close.

“The merger brings together Sky’s leading sports and entertainment content with our extensive mobile and fixed networks,” said Vodafone NZ CEO Russell Stanners in a statement, according to Bloomberg.

Sky has entered a loan facility with Vodafone for up to NZ$1.8 billion to fund the cash part of the deal and repay existing debts. Stanners will be CEO of the combined group, while Sky Chairman Peter Macourt will be its chairman, Bloomberg added.

Sky was advised by Citigroup, while Deutsche Bank AG and Deutsche Craigs advised Vodafone.

Vodafone NZ has over 2.35 million mobile connections and over 500,000 fixed-line connections in New Zealand. SKY is New Zealand’s leading pay TV provider with over 830,000 subscribers.

The deal must be approved by Sky shareholders. A meeting is expected to take place in early July, Reuters added

Vodafone Group Plc operates as a telecommunications company worldwide. The company offers voice, messaging, and data services across mobile and fixed networks; broadband and TV services; cloud and hosting, as well as Internet protocol-virtual private network services; roaming services; and unified communications services.

The company serves 462 million mobile, 13 million fixed broadband, and 9.5 million TV customers. It sells its products primarily through branded stores, distribution partners, and third party retailers. Vodafone Group Plc was founded in 1984 and is based in Newbury, the United Kingdom.

Sky Network Television Ltd provides multi-channel, pay television, and free-to-air television services in New Zealand. The company broadcasts approximately 100 channels on its digital satellite platform, including basic package of a total of 58 channels comprising news, sports, documentaries, family programs, general entertainment, radio stations, and free to air channels; and premium channels consisting of 5 sports channels, 6 movie channels, The Rugby Channel, World TV, the Arts Channel, and Country TV. It also offers video on demand service for MY SKY and MY SKY HDI customers; and a range of sports, movies, entertainment, news, documentary, and pay-per-view program content. It has 851,561 subscribers. Sky Network Television is based in Auckland, New Zealand.

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