The DIRECTV Group will pay $579 million to consolidate its Latin American operations with other satellite television businesses in Brazil, Mexico, Colombia and Chile.
In Brazil and Mexico, DIRECTV will sell service under News Corporation’s Sky brand, Bob Marsocci, a DIRECTV spokesman, told Bloomberg News. Sky customers in Colombia, Chile and other countries will shift to DIRECTV.
Combining DIRECTV and the Sky units now controlled by Rupert Murdoch’s News Corporation improves their potential for profit, Rich Greenfield, an analyst with Fulcrum Global Partners, wrote in an investor note. Investors may have to wait several years to see results, he said.
DIRECTV will acquire the interests of Sky Brasil and Sky Mexico held by News Corporation and Liberty Media International. DIRECTV will also buy interests held by Globo, Televisa, News Corporation and Liberty in Sky Multi-Country Partners, which sells satellite TV service in Colombia and Chile.
DIRECTV will have one-time costs of about $200 million, including $100 million to move subscribers to the same type of set-top boxes, and $100 million related to a satellite that will not be needed.
The combined Latin American operations have about 3.4 million subscribers.