Vodafone is set to own 51% of the combined company and the head of Vodafone's New Zealand operations Russell Stanners will be the chief executive of the new company.
Sky will pay Vodafone NZ$1.25 billion in cash and issue new shares at a 21% premium to its closing price on Wednesday.
Vodafone NZ has more than 2.35 million mobile connections and more than half-a-million fixed line connections. Sky has 830,000 subscribers.
