Comcast acquires Sky for $40.0 billion, edging out Twenty-First Century Fox

Sky is at the centre of a bid battle between Comcast the world’s biggest entertainment company and Rupert Murdoch’s 21st Century Fox. Stock

Sky is at the centre of a bid battle between Comcast the world’s biggest entertainment company and Rupert Murdoch’s 21st Century Fox. Stock

The price of both offers will be announced following the auction, after which the Sky board will recommend an offer for shareholders to accept.

Some analysts, however, said that Comcast's bid of 17.28 pounds per share in the rare blind auction was driven by an urgent need to build scale to defend against the threat posed by streaming services Netflix (NFLX.O) and Amazon (AMZN.O).

Now the takeover contest has come to an end, with Comcast emerging victorious after outbidding 21st Century Fox with a final offer of $40 billion for Sky. 21st Century Fox already owns 39% of the company.

Saturday's outcome dealt a potentially fatal blow to Murdoch's attempts to acquire the 61 per cent stake in Sky he did not already have but has long sought.

Buying Sky would mean Comcast generates a quarter of its sales outside of the United States, up from 9% now.

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In the end, Comcast perhaps needed it more urgently with their home market in the United States dwindling.

Buying Sky allows Roberts to expand the content and distribution model he has embraced since buying NBCUniversal seven years ago.

Comcast's final offer was significantly higher than its bid going into the auction of 14.75 pounds, and compares with Sky's closing price of 15.85 pounds on Friday.

Netflix has relied on other companies' broadband networks to distribute its lavish in-house productions and expand its global subscriber base to 130 million, and its rivals are still looking for an effective response.

Sky also gives Comcast an immediate beachhead in online video streaming with its Now TV business, which has about 2 million customers.

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In a statement on Saturday, Roberts called the auction results "a great day for Comcast". "Comcast found Sky attractive because it provides a foothold in Europe and will make it less dependent on the United States".

Fox faced heavy scrutiny from the United Kingdom government and competition watchdogs over its Sky takeover plans, while Comcast's bid was cleared by regulators early in the process.

The almost two-year battle for Sky has reshaped the global media-entertainment landscape and put Comcast in pole position to take on emerging online rivals.

Russ Mould, investment director at broker AJ Bell, warned Sky customers that the price of subscriptions could rise as Comcast looks to recoup the money it has spent on the company. While Comcast acquired NBCUniversal and DreamWorks Animation over the past decade, it failed in attempts to buy Disney in 2004, Time Warner Cable Inc.in 2015 and Fox in July.

Pivotal Research Group's Brian Wieser said in a note it was likely Disney would sell the minority stake in Sky it would own following the Fox deal.

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