Sky TV to buy Three owner for $1
Sky TV has agreed to fully acquire TV3 owner Discovery New Zealand for $1.
Discovery NZ is a part of United States media giant Warner Bros. Discovery.
NZX-listed Sky said the deal would be completed on a cash-free, debt-free basis, with completion expected on August 1.
Sky expected the deal to deliver revenue diversification and uplift of about $95 million per year.
It expected Discovery NZ's operations to deliver sustainable underlying earnings growth of at least $10m from the 2028 financial year.
Sky chief executive Sophie Moloney said it was a compelling opportunity for the company, with net integration costs of about $6.5m.
"[It] directly supports our ambition to be Aotearoa New Zealand's most engaging and essential media company."
Sky said it gave the Commerce Commission confidential advance notice of the transaction and the watchdog did not intend to consider the acquisition further.
Warner Bros. Discovery Australia and NZ managing director Michael Brooks said it was a "fantastic outcome" for both companies.
"The continued challenges faced by the New Zealand media industry are well documented, and over the past 12 months, the Discovery NZ team has worked to deliver a new, more sustainable business model following a significant restructure in 2024.
"While this business is not commercially viable as a standalone asset in WBD's New Zealand portfolio, we see the value Three and ThreeNow can bring to Sky's existing offering of complementary assets."
Sky said on completion, Discovery NZ's balance sheet would be clear of some long-term obligations, including property leases and content commitments, and would include assets such as the on demand ThreeNow platform.
Sky said irrespective of the transaction, the company was confident of achieving its 30 cents per share dividend target for 2026.
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