Foxtel is banking on a $2.5 billion dollar gamble that they can grow market share after they reached agreement to take over Austar.

The pay TV group that is part owned by Rupert Murdoch and Telstra has struggled to grow market share this year. In a statement issued last night  the proposed deal, which had the backing of U.S. cable company Liberty Global  Austar’s majority shareholder, would result in its shareholders receiving $1.52 per share.

The statement said Austar’s independent directors recommended minority shareholders vote in favor of the scheme in the absence of a superior offer and subject to an independent expert concluding that the takeover is in the best interests of shareholders.

In recent months Foxtel has moved to cut deals with Telstra who own 50% of the pay TV Company and Microsoft to deliver Foxtel content over the Telstra TV network and via the XBox 360 Live Network.

The takeover is subject to conditions including approval by shareholders, the Australian Competition and Consumer Commission, the Foreign Investment Review Board and rulings by the U.S. Internal Revenue Service.

Foxtel is anticipating annual revenue of more than A$2.8 billion from the combining of the two Companies

“A merged Foxtel and Austar would make compelling strategic sense and it would continue to invest and innovate in a superb digital service for consumers across Australia,” Foxtel Chief Executive Kim Williams said.