Televisa Acquires Full Control of Sky Mexico

Grupo Televisa has secured full equity control of Sky Mexico through the acquisition of AT&T’s capital stock, aiming to consolidate its position in Mexico’s pay television market. This acquisition represents a significant change in the company's structure, presenting an opportunity to drive growth in a sector in recent complications.

The transaction, subject to customary regulatory approvals, will be carried out with a scheduled payout in 2027 and 2028, as communicated by Televisa to the Mexican Stock Exchange (BMV). Under the agreement, Luis Malvido, the acting CEO of Sky Mexico, will leave his position on April 15, 2024, after more than two years in the position. Francisco Valim, who currently serves as CEO of Izzi telecom, will assume the position and will work to generate significant synergies and efficiencies for Televisa, according to the group's Co-CEOs Bernardo Gómez and Alfonso de Angoitia.

This acquisition, according to the analysis of the US credit rating agency Fitch, has been received without alarm among rating agencies given that Televisa's rating remains unchanged, emphasizing that the expected synergies and efficiencies will allow the company to maintain its leverage metrics in line with its current rating: BBB/Negative. S&P Global Ratings anticipates that the consolidation of Grupo Televisa's Sky and Cable segments could generate greater cash flow generation through operating synergies and capital expenditure efficiencies.

Televisa, one of Mexico's leading pay-TV providers, has maintained a strong market position. As of June 2023, according to the Federal Communications Institute, the company had a 58% subscriber market share and remained the second-largest fixed-broadband operator, with a 24.7% market share.

However, these results were affected by the fall in Sky's profitability, which, according to El Financiero, is expected to continue. Sky's profitability, according to company forms, fell by 15% during the fourth quarter of 2023 compared to 2022, caused by more than 160,000 disconnections.

Despite these challenges, Televisa’s investment in Sky Mexico, indicates a strong conviction to overturn the platform’s recent downturn. The injection of capital is expected to be channeled into areas critical for subscriber growth, such as service enhancement, customer retention campaigns, and perhaps expanding into new content areas or technology like 4K broadcasting or internet-based offerings.