Rupert Murdoch’s European pay TV flagship Sky has agreed to sell a controlling stake in its online betting division, Sky Betting & Gaming, to CVC Capital Partners.
Sky, Britain’s largest pay television provider, will receive £600 million (US$941 million) on completion of the sale, with the possibility of another £120 million pending other contingencies, the company said in a statement cited by Bloomberg.
The acquisition includes Sky Bet, its sports betting business; Sky Vegas & Sky Casino, its casino gaming businesses, Sky Poker and Sky Bingo, and Oddschecker, the UK’s leading odds comparison site. The executive team, under the leadership of Managing Director Richard Flint, will remain with the business under the new ownership structure, with all Sky Bet’s employees moving across into the new entity. The business will remain headquartered in Leeds.
The deal is subject to regulatory approvals in the UK and Ireland and is expected to be completed in the first three months of 2015.
Plans call for UK-based Sky to retain a stake in the division of about 20 percent.
“This transaction will allow us to focus further on the substantial growth opportunities in our core international pay- TV business while realizing significant value for our shareholders,” Chief Executive Officer Jeremy Darroch said in the statement.
Sky is also the continent’s biggest pay television provider with 20 million customers in five countries. Following acquisitions in Italy and Germany earlier this year, the company is focusing on a broader plan to unite cross-border TV production and bidding to air sports matches and will have more heft when negotiating advertising deals as well as the rights to air TV programs.
Sky has paid more than $10 billion to merge Sky Italia and Sky Deutschland with its UK business. Those purchases will take Sky’s adjusted debt to about £7.9 billion pounds, said Standard & Poor’s, which has lowered the company’s credit rating one level to BBB.
With 11 million subscribers, Sky’s UK arm, formerly known as British Sky Broadcasting Group, is the dominant member of the group and spends about £2.6 billion a year making original TV programs, acquiring rights to Hollywood films and airing exclusive sports events like the English Premier League soccer matches.
