Telefónica has snapped up 21% of the satellite assets of Spain’s largest media group Prisa, for €470 million.
Under the deal Telefónica will pay Prisa €240 million in cash and cancel out €230 million of debt, for the stake in leading satellite platform Digital+.
The transaction follows speculation that media players BSkyB and Vivendi had been trying to buy the entire satellite platform around €2.6 billion.
In late October Telefónica's president, César Alierta, said that negotiations with Prisa for a Digital+ buyout were "going the right way" adding that the carrier might take a small stake in the satellite firm.
Prisa described Telefónica as the “best imaginable strategic partner” for Digital + which has 2 million subscribers.
The deal, which is subject to regulatory approvals, will allow Telefonica the right to appoint two members to the board of Digital+.
Prisa has been selling assets in a bid to hack away at a €5 billion debt pile.
The media giant has been suffering from the decline in advertising since early last year.
Telefónica has its own IPTV service, Imagenio and the alliance will also give it easier access to new content for Imagenio, which has about 700,000 subscribers.
The companies have also signed a broad agreement to co-operate on audiovisual development and other services of both companies.