British Sky Broadcasting Group otherwise known as BSkyB has announced that it will purchase Telefonica's fixed-line business within the UK. That fixed-line business covers both broadband and telephony businesses. The purchase will cost BSkyB $303 million (£200million) and the deal was announced early today.
The deal isn't complete just yet and is subject to regulatory clearance. The two companies expect the deal to close in April. If the deal receives regulatory approvals Telefonica UK customers will be moved from existing O2 and BE broadband and will become Sky customers.
The deal will make Sky the UK's second largest Internet provider putting it behind BT and ahead of Virgin Media in size. The deal breaks down to £180 million for Telefonica's broadband business. An additional £20 million will be granted conditionally. The condition for that extra money is the "successful delivery completion of the customer migration process."
According to reports, Telefonica's broadband fixed line service has seen its customer base shrinking. The company peaked at 671,000 customers and then declined to its current 560,000 customer range. Many companies within the UK are keen to acquire other firms so this isn't likely to be the only consolidation in the UK market for telecommunications this year.