News Corp has cleared the first hurdle in its plan to take control of BSkyB, after being given the thumbs up by European competition authorities.
The decision leaves News Corp clear to make a formal offer for the 60.9% of BSkyB it doesn’t already own, providing it also gains approval from UK regulator Ofcom, which is assessing the impact of the deal on the country’s media market.
The European Commission reasoned that there is little cross-over between the businesses of News Corp and BSkyB in the UK and Ireland, and that the take-over would result in only a marginal increase in BSkyB’s market share of basic pay-TV channels.
It also found that News Corp was unlikely to act anti-competitively in the premium film and advertising sectors, where there are enough alternatives available to rival firms, and that the deal would have little impact on newspaper publishing because low levels of subscription services will prevent the firm offering bundled services.
EC competition commissioner Joaquin Almunia said he was satisfied the “merger will not weaken competition in the UK,” but noted the probe into the impact on media plurality is “a matter for the UK authorities."
Ofcom opened an investigation into the merger after executives from leading media firms complained that the deal would impact media plurality.
The regulator is due to announce the results of its probe on December 31.
BSkyB directors rejected an initial £7.8 billion (€9.2 billion) offer from News Corp in June, stating the price was too low and that regulatory clearance would be needed before they opened formal talks.