NEWS Corporation Ltd last night announced it had acquired a controlling stake of 63.6 per cent of HutchVision Ltd (BVI), the company which supplies all of STAR TV's programmes.
The deal, which enables media magnate Rupert Murdoch to break into the region's fast-growing satellite television industry, involves payment of US$525 million (about HK$4.07 billion), half in cash and half in News Corp ordinary shares, to HutchVision's joint owners - Hutchison Whampoa and tycoon Li Ka-shing and his family.
Hutchison and the Li family will jointly retain the remaining 36.4 per cent in HutchVision Ltd (BVI).
The company is the producer, packager and marketer of the STAR TV service which is delivered to the licensee for transmission.
A separate company, HutchVision Hongkong Ltd, is licensed by the Government to transmit the STAR TV service and will remain in the control of Hutchison and the Li family.
The surprise announcement came after an earlier deal for News Corp to buy 22 per cent of Television Broadcasts Ltd (TVB) was withdrawn due to regulatory obstacles which restrict foreign ownership of any local television broadcaster to 15 per cent.
A Government spokesman said last night that nothing in the regulatory framework prohibited the acquisition of News Corp's interest in HutchVision.