The deal, which analysts say could be worth up to £8.8bn and would create a broadcaster with 20m subscribers across Europe, was described by BSkyB as in “preliminary stages” yesterday.
Investec analyst Steve Liechti warned that a deal would have few near term benefits for BSkyB due to the weaker businesses of both Italia and Deutschland. “This looks a negative for BSkyB near term given… potential share issuance dilution. Fundamentally, this looks sensible for scale, but Italia and Deutschland are in weaker competitive positions with lower margins/returns vs BSkyB,” he said. With increasing competition in the UK from BT’s push into sport and pay-TV, City A.M. understands BSkyB sees the move as a way to create synergies by expanding sales of services like Sky Go across Europe and sharing the costs of set-top boxes across a larger group.