Sky has announced a £180m deal with Telefonica to buy its O2 and BE broadband businesses.
The acquisition will make Sky the second largest broadband provider in the UK behind BT and ahead of Virgin Media. The total of more than half a million O2 and BE broadband customers will become Sky customers on completion. See also: Sky unveils 'Whole Home' web parental control.
Jeremy Darroch, Chief Executive of Sky, said: "Sky has been the UK's fastest-growing broadband and telephony provider since we entered the market six years ago. From a standing start in 2006, we have added more than 4.2 million broadband customers. The acquisition of Telefónica UK's consumer broadband and fixed-line telephony business will help us accelerate this growth."
On top of the £180m, Sky may up to an extra £20 depending on how successful customer migration is dealt with by Telefonica. Customers will be moved to Sky's 'fully unbundled network' which reaches 84 percent of the UK's homes.
Sky said it is the UK's most popular triple-play provider with 3.6 million of its customers on the package. It said that gaining O2 and BE "will help Sky meet the growing demand from customers to take multiple products."
"We believe that the O2 and BE consumer broadband and telephony business is a great fit, with customers used to high-quality products and strong levels of customer service. We look forward to welcoming these new customers to Sky and giving them access to our wide range of high-quality products, great value and industry-leading customer service." added Darroch.
Sky said the acquisition will be funded from existing cash reserves and is expected to be completed by the end of April. The deal is subject to regulatory clearance.