(Adds broker comment, share price reaction)
WELLINGTON, June 9 (Reuters) - Sky Network Ltd andVodafone Group Plc announced a deal on Thursday underwhich Sky and Vodafone's New Zealand unit would merge.
Under terms of the deal outlined in a joint press release,Sky would acquire all of the shares in Vodafone NZ for a totalpurchase price of NZ$3.437 billion ($2.44 billion) through theissue of new Sky shares, giving Vodafone Europe B.V. a 51percent interest in the combined group and cash consideration ofNZ$1.25 billion, to be funded through new debt.
The new Sky shares will be issued at NZ$5.40 per share,representing a 21 percent premium to Sky's last close.
Sky's shares jumped 20 percent on the news at Thursday'sopen, bringing them to NZ$5.35.
"It's a very big deal for Sky TV and the market is going totake some time to digest it and work through the impact," saidForsyth Barr Investment Adviser Adrian Vance.
He noted that Spark is under some pressure, down6.7 percent on the uncertainty of the impact of this combinedcompany.
Vodafone NZ has more than 2.35 million mobile connectionsand more than 500,000 fixed-line connections in New Zealand. Skyis New Zealand's leading pay TV provider with over 830,000subscribers.
The combined group will be one of the largest companieslisted on the New Zealand stock exchange and will have forecastpro-forma revenue of NZ$2.9 billion.
The deal must be approved by Sky shareholders. A meeting isexpected to take place in early July. ($1 = 1.4106 New Zealand dollars) (Reporting by Rebecca Howard; Editing by Matthew Lewis)