UK government refers 21st Century Fox’s Sky takeover bid to competition authorities
Details
Joseph O'Halloran
| 29 June 2017

In a blow for Rupert Murdoch’s long-held ambition to achieve a complete takeover of the broadcaster, UK Culture Secretary Karen Bradley has referred 21st Century Fox's acquisition bid of Sky to the country’s Competition and Markets Authority.

In March 2017, when the UK Government formally notified the European Commission of the 21st Century Fox acquisition of the pay-TV giant, Bradley noted that the deal, which will see 21st Century Fox make a second attempt to buy the shares in Sky that it does not already own,*had*potential public interest issues, namely, with regards to plurality of media ownership and commitment to broadcasting standards. She requested UK telecoms regulator Ofcom to report by 16 May 2017 on the effects of the proposed transaction on two public interest grounds: media plurality, and commitment to broadcast standards. This process was delayed by the UK General Election.
Having seen Ofcom’s report Bradley indicated that with regards to plurality of media ownership, she was minded-to refer for a fuller investigation and has invited further representations from the parties to the merger.

Ofcom was asked to consider whether there would be sufficient plurality of persons with control of the media enterprises; and whether the parties would have genuine commitment to the attainment in relation to broadcasting of standards objectives. Its report concluded that the proposed transaction raises public interest concerns relating to media plurality. In addition, Ofcom noted that the deal as it stood contained a risk of increased influence by members of the Murdoch Family Trust over the UK news agenda and the political process, with its unique presence on radio, television, in print and online. Ofcom considered these concerns may justify a reference by the Secretary of State to the Competition and Markets Authority.

On the question of genuine commitment to broadcasting standards, Bradley was minded-not to refer to a further investigation.

Commenting on the adjudication, Sky said that it welcomed the announcement of Ofcom's decision and that it would continue to be a fit and proper holder of its broadcast licences under full ownership of*21st Century Fox, continuing to operate its business as usual.*21st Century Fox added: "While we welcome the Secretary of State’s decision on broadcasting standards, we are disappointed that she does not accept Ofcom’s recommendation stated in its report that '....the proposed undertakings offered by Fox to maintain the editorial independence of Sky News mitigate the media plurality concerns.' "

21st Century Fox made official its takeover bid for the European pay-TV giant on 10 December, with Sky’s independent directors confirming that the company had received an approach*from the Rupert Murdoch-owned US media company, reaching agreement on an offer price of £10.75 per share in cash. *Sky’s directors advised shareholders to accept the deal, Murdoch’s second attempt to take over Sky after the first attempt floundered in the wake of the phone hacking scandal.