News Corp, Telstra Agree to Combine Foxtel, Fox Sports Australia

By Robb M. Stewart 

MELBOURNE, Australia -- News Corp has struck a deal to combine its Fox Sports broadcasting operation in Australia with the Foxtel cable platform that it owns jointly with telecommunications operator Telstra Corp.

The path to a formal tie-up was cleared in December when Australia's corporate regulator said it wouldn't stand in the way of deal, which it determined wouldn't substantially lessen competition.

The companies have said a combination of the operations would better position them for an initial public offering in the future.

In line with plans laid out by the companies last year, News Corp will own 65% of the combined venture and Telstra the remaining 35%. News Corp will be able to appoint four directors to the board of the combined company, including the chairman, and Telstra two directors.

"The launch of the combined company will mark the dawn of a new era for our Australian business," News Corp Chief Executive Robert Thomson said in a statement.

News Corp currently owns all of Fox Sports Australia and has an equal 50% stake in the Foxtel operations. News Corp's newspaper publishing units include Dow Jones & Co., publisher of The Wall Street Journal and HarperCollins Publishers.

In a filing to the Securities and Exchange Commission, News Corp said it expected to record an impairment charge and write-downs of between US$700 million and US$1.1 billion in the three months through March for its investment in Foxtel and Fox Sports Australia.

Telstra said it expects to record a one-off accounting gain of 263 million Australian dollars (US$204 million) from the deal but expects no change to earlier guidance for the financial year.

Write to Robb M. Stewart at [e-mail]

(END) Dow Jones Newswires

March 05, 2018 18:51 ET (23:51 GMT)

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