Jskyb, Perfectv To Merge

Japanese satellite broadcasters Japan Sky Broadcasting Corp (JSkyB) and PerfecTV on Tuesday said they will join hands in early April to create Japans largest direct satellite broadcasting platform.

Under the agreement, PerfecTV, which in 1996 became the nations first digital broadcasting company, will merge on an equal footing with media tycoon Rupert Murdochs JSkyB. We hope to meet the various requirements of viewers in an era of multi-channel service, the companies said in a joint statement.

The two companies said their major shareholders had agreed to the terms and conditions of the merger, under which one JSkyB share would be exchanged for one PerfecTV share.

PerfecTV, owned by trading companies Itochu Corp, Sumitomo Corp, Mitsui & Co and Nissho Iwai Corp , has been on the air since autumn 1996. By mid-December it had signed up 500,000 subscribers, short of its original target.JSkyB, owned primarily by Murdochs News Corp , Sony Corp, Fuji Television Network and Softbank Corp, was expected to offer 100 channels of broadcasting from April.

PerfecTV president Koya Mita will head the new firm as its president, while Hajime Unoki, president of JSkyB, will become chairman. Unoki became JSkyBs president on Sunday, replacing billionaire Masayoshi Son, also president of Softbank, who stepped down from the post but remained a JSkyB director.

The planned alliance could make Sony, also a shareholder in PerfecTV, the largest investor in the new firm, but a JSkyB official told Reuters that each shareholders stake in the new firm would be discussed by a joint task force that will be formed to lay the groundwork for the merger.

The alliance was expected to deal a severe blow to competitor DirecTV Japan Inc, which launched a 63-channel service on December 1. DirecTV Japans main shareholders are DirecTV International Inc, a division of Hughes Electronics Corp of the United States, and Japanese video rental chain Culture Convenience Club Inc.

Industry sources said that it would have been difficult for Japan to support three separate satellite platforms and they had expected some sort of consolidation in the market.