Rupert Murdoch and John Malone put an end to two years of negotiations yesterday as they signed a deal securing the Murdoch family's grip on News Corporation.
Mr Malone's Liberty Media agreed to swap its $11 billion (€8.34 billion) of voting shares in the media group for Mr Murdoch's stake in DirecTV, the US satellite operator, a move that will raise the Murdoch voting share in News Corp to 38 per cent.
The deal comes exactly three years after Mr Murdoch won a long fight to buy DirecTV. His willingness to now sell the business, once seen as essential for distribution muscle, reflects the increasing importance of the internet to his business strategy.
In addition to 38.5 per cent of DirecTV shares, Liberty will get three regional US sports networks and $550 million in cash.
Mr Malone is a cable industry pioneer who, like Mr Murdoch, is known for his deal-making savvy. He sold his cable stakes several years ago and is expected to use this acquisition to again become a big hitter.
A statement from Liberty said: "DirecTV and the regional sports networks represent a critical step in our efforts to transform Liberty into a well-positioned, focused operating company."
The deal was verbally agreed by the two billionaires about two weeks ago. For News Corp shareholders it is equivalent to an $11 billion share buyback, one of the biggest ever. The deal allows both groups to cash in on DirecTV and News Corp and save billions of dollars in tax.
Two years ago Mr Malone increased his voting stake in News Corp to 19 per cent, leaving Mr Murdoch (75) worried about his family's control of the media empire he built up. News imposed poison pill measures to prevent Mr Malone from increasing his stake. These will be removed when the deal is completed.
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