Rupert Murdoch's BSkyB agreed yesterday to take a 24 percent shareholding in Germany's KirchPayTV for 2.9 billion deutschemarks ($1.5 billion), achieving a long-held ambition of entering Europe's biggest TV market.
KirchPayTV operates the major subscription television services in Germany and Austria through its recently merged Premiere and DF1 operations.
Under the alliance, BSkyB will pay one billion marks in cash and issue 78 million new BSkyB shares to KirchPayTV, valued at approximately £622 million sterling ($997 million), giving Kirch a 4.3 per cent stake in the British company.
The agreement brings together the media moguls, Mr Murdoch, chairman of BSkyB and the global News Corp business, and Mr Leo Kirch, who heads a German empire spanning TV, music and print.
BSkyB said the deal was expected to dilute earnings per share for a number of years. However, it said the investment would enable it to benefit from the development of the German market and create long-term value for shareholders.
