Rupert Murdoch's News Corp. Ltd. on Oct. 11 said it will sell its stake in Sky Latin America to its DirecTV Group for $579 million, creating satellite broadcast monopolies in a region where profits ha
NEW YORK (Reuters) -- Rupert Murdoch's News Corp. Ltd. on Oct. 11 said it will sell its stake in Sky Latin America to its DirecTV Group for $579 million, creating satellite broadcast monopolies in a region where profits have been elusive.
For DirecTV Latin America, which emerged from bankruptcy in February 2004, the move eliminates competition in troubled Latin American regions where subscribers have dwindled in the face of economic recessions, political turmoil and currency fluctuations.
For News Corp., it simplifies a series of complex ownership stakes, while allowing it to participate in the market via its controlling stake in DirecTV.
DirecTV, the top U.S. satellite television broadcaster, will bolster its DirecTV Latin America, which is 86% owned by DirecTV, by consolidating its interests with Sky Latin America into a single platform in Brazil, Mexico, Chile and Colombia.
News Corp. owns a minority, non-controlling stake in Sky Latin America.
DirecTV will shed its stake in its Mexico operations to Sky Mexico, controlled by Grupo Televisa, and buy the interests of satellite operations in Colombia and Chile from Liberty Media International, News Corp. and Globopar.
DirecTV will buy News Corp.'s and Liberty's stake in Sky Brasil, which will take over DirecTV Brazil's subscribers.
News Corp. also received an option to buy up to 15% of Sky Mexico, depending on the number of subscribers that switch from DirecTV Mexico and remain customers of Sky Mexico.
DirecTV also said it would acquire Sky Multi-Country Partners, which provides satellite TV in Colombia and Chile, from Globo, Televisa and News Corp. Sky customers in Colombia and Chile will move to DirecTV.
DirecTV said it will operate in Colombia and Chile, as well as in Argentina, Venezuela, Puerto Rico, the Caribbean and the rest of Latin America, under the newly created "PanAmericana" platform.
Several of the new agreements are subject to approval from local governments.