UK govt nod for Newscorp-BSkyB merger
04 Mar 2011
The UK government through its department for culture, media and sports yesterday cleared a major obstacle in the full acquisition of satellite television company British Sky Broadcasting Group Plc (BSkyB) by media baron Rupert Murdoch's News Corp by accepting the latter's undertakings on media plurality concerns.
Culture secretary Jeremy Hunt said that following advice from the nation's communications industry regulator Ofcom and competition authority Office of Fair Trading (OFT), he intends to accept News Corp's undertakings on its proposed takeover of BSkyB in lieu of a referral to the Competition Commission.
The department issued a notice of consultation yesterday seeking views as to whether News Corp's undertakings are sufficient to allay public fears on media plurality raised by the merger. The closing date for responses is fixed as 21 March.
The secretary would look at the specific issue of media plurality related to the merger, which focuses on the provision of news.
News Corp, the world's third-largest media conglomerate and the owner of Fox Broadcasting, 20th Century Fox movie studios, The Wall Street Journal, The Sun, The Times and The Sunday Times, announced its intention to take full control of Britain's largest pay TV operator BSkyB back in June 2010. (See: News Corporation bids for full control of BskyB)
The $33-bn media giant, which currently owns around 39 per cent of BSkyB or 686 million shares, intends to buy the remaining 61-per cent stake for 700 pence a share or approximately £7.8 billion ($12.7 billion).
News Corp has offered to 'spin off' Sky News as an independent public limited company by distributing its shares to the existing shareholders of BSkyB, with News Corp owning a 39-per cent stake.
