Rupert Murdoch’s News Corporation and MCI, Americas second largest telephone company, have signed a $2.4bn deal to create a global entertainment and information joint venture.
MCI, in which British Telecom holds a 20% stake, will invest up to $2bn to aquire a 13.5% voting stake in News Corporation. Seperately MCI, and News Corporation will invest $200m each into the joint venture. News Corporation said it may pay for its share through assets in the TV networks BskyB and Star. Although British Telecom is a partner in the deal, it is unlikely that the link up will be available to British consumers due to regulatory restrictions, but a BT spokesman said yesterday that it offered the company huge scope.
News of the agreement boosted News Corporation’s share price and at the end of trading last night, had risen almost $2. The deal is expected to spark interest in other media companies and telecommunications operators to link-up.
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