British Sky Broadcasting (aka Sky) has agreed to acquire Virgin Media’s VMtv, the companies jointly announced this morning. Sky will buy VMtv for a total consideration of up to £160 million in cash, with £105 million paid on completion and the remainder paid following the regulatory process.
The acquisition is to expand Sky’s portfolio of basic pay TV channels and eliminate the carriage fees it currently pays for distributing VMtv channels on its TV services.
Sky has agreed to start selling advertising for the VMtv channels from January 2011 onwards.
Virgin Media will make available through its on-demand TV service a range of content from Sky’s basic and premium channels, including Sky1, Sky Arts and the newly acquired VMtv channels. Virgin Media will also have access to red button interactive sports coverage.
For an incremental wholesale fee, Virgin Media will also have the option of carrying any of Sky’s basic HD channels, Sky Sports HD 1 and Sky Sports HD 2, and all Sky Movies HD channels.
Completion of the agreements is conditional on obtaining merger control clearance in the Republic of Ireland.