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Fox’s bid for Sky set for Ofcom investigation

The UK’s Secretary of State for Culture Media and Sport, Karen Bradley, has today (Thursday) confirmed that US media company 21st Century Fox’s proposed takeover of pan-European pay-television broadcast group Sky will be investigated by UK media watchdog Ofcom.

Earlier this month, Bradley said she was “minded to” refer the deal to the regulator after the parties involved issued formal notification of the merger to the European Commission.

Fox and Sky in December confirmed they had reached agreement on the terms of a recommended pre-conditional cash offer by the former for the fully diluted share capital of the pan-European pay-television broadcaster, which Fox and its affiliates do not already own.

The announcement came after Sky, a major broadcaster of sports coverage, confirmed a takeover approach for the 61 per cent of the company that is currently not controlled by Rupert Murdoch’s Fox in a deal that is set to value Sky at £18.5bn (€21.7bn/$23bn).

Ofcom’s investigation is set to centre around whether the deal will give the Murdoch media empire too much control of news output in the UK and whether the Murdoch family are “fit and proper” owners following the phone-hacking scandal that engulfed the now-defunct News Corporation, then parent entity of Fox and Murdoch’s UK newspapers.

Ofcom will now have up to 40 working days, through to May 16, to report back to Bradley on the public interest concerns, and will commence its own concurrent review of whether Fox is “fit and proper” to assume control of Sky’s broadcasting licence.

Bradley told MPs today: “Having carefully considered the representations from the parties and the other representations I have received… I have issued a European Intervention Notice on the grounds of media plurality and commitment to broadcasting standards. I have written to the parties, Ofcom and the Competition and Markets Authority informing them of my decision.

“While the representations from 21st Century Fox highlighted areas where it contested the position taken in my minded to letter, none of the representations have lead me to dismiss the concerns I have regarding the two public interest grounds I previously specified.”

She added: “Since my minded to decision, I have also received just over 700 representations from third parties the vast majority of which supported intervention.”

Fox currently has a 39-per-cent stake in Sky, which in 2014 completed acquisitions of sister operators Sky Deutschland in Germany and Sky Italia in Italy. Fox has previously said the Sky deal is expected to close before the end of 2017.