BSkyB has completed a deal to create Sky Europe, bringing together Sky Italia and Sky Deutschland in a multi-billion pound deal.

The company has agreed to acquire 21st Century Fox’s 100% stake in the Italian operation and its 57.4% stake in the German unit in a move that will create a pay-TV firm with 20m subscribers.

It will pay £2.45bn in cash for Sky Italia, as well as transferring BSkyB’s 21% stake in National Geographic Channels International, which is worth £2.07bn, and £2.9bn for its interest in Sky Deutschland.

BSkyB hopes that the enlarged group will be able to save £200m by the end of the second year, taking advantage of synergies between the UK and Italian arms. It expects to be able to save money on acquired programming rights, production of live events and commissioning as well as back office costs.

Jeremy Darroch, BSkyB’s chief executive, said: “This transaction will create a world-class, multinational pay TV business with enhanced headroom for growth and immediate benefits of scale. The three Sky businesses are leaders in their home markets and will be even stronger together. By creating the new Sky, we will be able to use our collective strengths and expertise to serve customers better, grow faster and enhance returns.”

This comes as BSkyB recorded its annual results, which saw the company add 342,000 new subscribers last year, its highest growth in three years, taking its total number of TV customers to 10.68m. Revenues were up 7% to £7.6bn although operating profits dropped slightly to £1.26bn.

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