Fox in Preliminary Deal to Buy Sky at $23.2 Billion Valuation

(Bloomberg) -- 21st Century Fox Inc. reached a preliminary deal to acquire full control of Sky Plc, valuing the pay-TV provider at 18.5 billion pounds ($23.2 billion), as billionaire Rupert Murdoch seeks to consolidate his television empire.

The deal was reached between independent directors of both boards, though other elements remain under discussion, and there’s no certainty an official offer will be made by Fox, Sky said. Fox already holds a 39 percent stake in Sky.

Gaining total ownership of Sky would give Fox, which owns cable networks including FX and National Geographic, a powerful distribution platform in Europe for pay television and internet. Murdoch has long made clear his desire to own all of the asset. He was thwarted in a 2010 attempt to buy out other shareholders following revelations that two of his newspapers hacked into the mobile phones of celebrities and politicians.

Sky’s weaker share price this year and the drop in the pound relative to the U.S. dollar made the acquisition cheaper for Fox.

Murdoch’s attempt to put television programming and distribution under one roof follows AT&T Inc.’s $85.4 billion deal earlier this year to acquire Time Warner Inc. Both transactions are likely to face heavy scrutiny from regulators who may seek to ensure that the companies don’t prioritize their own networks’ content over competitors’.

To contact the reporter on this story: Rebecca Penty in London at rpenty@bloomberg.net. To contact the editor responsible for this story: Crayton Harrison at tharrison5@bloomberg.net.