Sky, Vodafone merger

Nick Dravitzki (Paul Henry)
Nick Dravitzki (Paul Henry)

Sky Television and Vodafone have agreed to a merger, which will see Vodafone take a 51 percent stake in the combined entity, through a mix of new shares and $1.25 billion in cash.

The new shares in Sky TV will be issued at $5.40 each, 21 percent up on the pay television operator's last closing price.

Vodafone has nearly 2.4 million mobile phone connections and more than half a million broadband connections, while Sky has more than 830,000 subscribers.

Who is benefiting the most from this business deal? Devon Funds portfolio manager, Nick Dravitzki, joined Paul Henry to explain.