PLDT-Sky Cable merger unplugged

MANILA, Philippines — Telco giant PLDT Inc. will no longer pursue its P6.75-billion buyout of Sky Cable Corp., marking the second time a deal between the two was called off.

PLDT and ABS-CBN Corp. yesterday announced they are abandoning the sale and purchase agreement they signed last year, in a surprise turn for a transaction that was making progress.

Sky Cable will thus be able to retain its cable TV segment to benefit its subscribers, and the company will also maintain Sky Fiber, its broadband service, in its fold.

Sky Cable was supposed to close its pay TV business on Feb. 26 as part of its sale to PLDT. With that deal now terminated, ABS-CBN said customers who opted to stay with Sky Cable can keep their subscriptions.

PLDT and Sky Cable decided to scrap the deal even though the merger has secured clearance from the Philippine Competition Commission. It took the parties roughly a year to secure the PCC’s approval to proceed with the transaction.

The sale was disclosed to the public in March 2023, but the parties received PCC clearance only in January 2024.

After the PCC review, there remained a number of closing conditions that PLDT and Sky Cable were supposed to complete before the merger could materialize.

Based on earlier disclosures, these closing conditions include obtaining boardroom approvals and government clearances, both of which PLDT and ABS-CBN never reported getting.

The cancellation of the Sky Cable buyout also marks the second time PLDT and ABS-CBN failed to complete a transaction between them. In 2022, Cignal Cable Corp., a unit under PLDT’s MediaQuest Holdings Inc., proposed to acquire 38.88 percent of Sky Cable for P7.5 billion.

However, the two were forced to call off the investment to fend off escalating pressures against ABS-CBN at the time. Sky Cable lost its right to provide direct-to-home services when ABS-CBN failed to renew its congressional franchise in 2020.

The sale of Sky Cable to PLDT would have reduced financial strain on the Lopez empire as it will let go of a business that has struggled to recover since 2020.

For PLDT, on the other hand, acquiring Sky Cable’s assets would have cemented its position as the largest telco in the Philippines and would have expanded its reach outside Metro Manila, where Sky Cable traces most of its subscribers.