European regulator approves 21st Century Fox takeover of Sky
08 Apr 2017
The European Commission (EC) yesterday unconditionally approved Rupert Murdoch's 21st Century Fox acquisition of the 61 per cent that it does not already own in British market-leading pay-TV provider Sky Plc.
However, the deal has yet to be approved by the regulators in the UK, where Sky is based.
In December 2016, 21st Century Fox, the US entertainment company controlled by Rupert Murdoch, had offered to buy the remaining 61-per cent it does not already own in Sky for $14.6 billion (£18.5 billion) (See: 21st Century Fox bids $14.6 bn for Sky Plc)
This is the second attempt by Fox to buy the whole of Sky. Its £7.8-billion offer in 2010 was derailed after it was revealed that two of Murdoch's newspapers had hacked into the mobile phones of celebrities and politicians, leading to a major scandal.
This failed attempt was made by Rupert Murdoch's News Corp, which has since split into two distinct publicly traded companies, 21st Century Fox and the new News Corporation.
The EC said that Fox and Sky are active in different markets in the Austria, Germany, Ireland, Italy and the UK and they compete with each other only to a limited extent, mainly in the acquisition of TV content and in the wholesale supply of basic pay-TV channels.
The EC found that the proposed transaction would lead to only a limited increase in Sky's existing share of the markets for the acquisition of TV content as well as in the market for the wholesale supply of TV channels in the relevant EU states.
The EC concluded that the transaction would raise no competition concerns in Europe.
Fox and Sky welcomed the EC approval, and said they would continue to work with the regulator in Britain where it faces scrutiny by Ofcom to complete the deal.
"We now look forward to continuing to work with UK authorities and are confident that the proposed transaction will be approved following a thorough review process," Fox said.
A successful deal would give Fox full control of a pay-TV network spanning 22 million households in the UK, Ireland, Austria, Germany and Italy.
It would also enhance Sky's leading position in entertainment and sports, and reinforce the UK's standing as a top global hub for content generation and technological innovation.
British Culture Secretary Karen Bradley has asked Ofcom to investigate the deal and give its report by 16 May.
Ofcom will also investigate to see whether Sky's owners are "fit and proper" and whether the deal would give Murdoch and his companies too much control of Britain's media.
Rupert Murdoch and his son Lachlan Murdoch are both joint chairmen of 21st Century Fox and News Corp, while his other son, James Murdoch is the CEO of Fox.