Entertainment
RTL has closed its deal to acquire Sky Deutschland from Comcast.
The deal completed this morning, bringing together two of central Europe’s big players as entertainment businesses seek consolidation to reach scale and compete against the tech giants.
The deal “underscores RTL Group’s strategic focus on in-country combinations in Europe to strengthen local media players and enhance their ability to compete with global streaming platforms,” the Luxembourg-based RTL said this morning in a statement.
Bertelsmann-owned RTL now owns Sky’s operations in Germany, Austria and Switzerland, including customers in Luxembourg, Liechtenstein and South Tyrol. The Sky business has about 12.3 million paying subscribers in total, and its purchase marks RTL’s biggest transaction since launching in 2000.
The upfront purchase price is not the previously-announced €150M ($174.8M), but €68M “reflecting customary net working capital and debt-like item adjustments” that are “consistent with the cash-free and debt-free basis of the transaction,” RTL announced today. The €68M is subject to customary post-closing adjustments, meaning that it is not necessarily the final amount.
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The deal also includes a variable consideration capped at €377M that Comcast can trigger at any time in the next five years provided RTL’s share price exceeds €36.26. This is lower than the previously stated €41, but reflects value of €4.74 related to the sale of RTL Nederland to DPG Media. RTL can settle the consideration in shares, cash or a combination of both, meaning Comcast could become an RTL shareholder in the future.
RTL expects the Sky deal to achieve €250M in annual synergies within three years. The company said this will be made “across all categories.”
Comcast had owned Sky Deutschland since late 2018 when it bought Sky’s wider European business in a deal worth around $40B.
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Jesse Whittock