Vodafone agreed to sell its New Zealand unit to Auckland-based Sky Network Television for $2.4bn in shares and cash, paving the way for a pivot by the British telecoms giant to faster growth markets in Asia. 
The deal, the biggest acquisition in New Zealand this year, also beefs up Sky as the country’s biggest pay-TV provider seeks to counter the rapid rise of online media streaming services like Netflix Inc Sky shares jumped nearly 20%. 
Under terms of the deal announced yesterday, Sky will buy New Zealand’s No 1 mobile phone provider for NZ$3.4bn ($2.4bn) in total – NZ$1.3bn in cash, to be funded through new debt, and the rest in new Sky shares. The deal is subject to regulatory clearance, the firms said. 
While Vodafone will own 51% of the combined entity if the deal goes through, analysts said it clears the path for the British firm to exit a market it has long considered non-essential by ultimately selling down its stake in a listed firm. 
“As far as Vodafone is concerned, it’s about them getting out of the New Zealand market altogether,” said Morningstar analyst Brian Han. It would be a “very natural read” to expect Vodafone to quit neighbouring Australia next, Han said. 
Analysts have suggested Vodafone should cut its exposure to the mature markets of Australia and New Zealand and instead focus on higher-growth Asia. Last month, Vodafone said developing markets were responsible for its first year of sales growth since 2008. 
Vodafone NZ has more than 2.35mn mobile connections and more than 500,000 fixed-line connections in New Zealand. Sky has over 830,000 subscribers.  The deal gives Sky the chance to broaden offerings beyond its traditional satellite broadcast market, shaken up by the arrival of Netflix 15 months ago, as well as by tech giant Apple Inc’s online content service. 
A spokesman for the NZ Commerce Commission said the country’s competition clearance regime is voluntary. “It will depend on whether or not Sky and Vodafone submit an application to us...Until all the detail is established, no-one can assess what the competition issues will be.” 
Reflecting the pressure on its business, Sky shares had fallen 28% in the year leading up to the deal’s announcement. 
In New Zealand yesterday, Sky shares closed up 17% at NZ$5.25, below the NZ$5.40 per share issue price of new stock for Vodafone. If the deal succeeds, the new company will be one of New Zealand’s biggest listed companies with annual revenue of about NZ$2.9bn, the companies said.  Shareholders are scheduled to vote on the deal at a meeting in July.