U.K. Government Confirms It Will Refer Fox-Sky Takeover for Review

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The British government confirmed Thursday that it would, as expected, send 21st Century Fox’s $15 billion takeover bid for Sky to the U.K.’s Competition and Markets Authority for a formal review.

The authority will take about six months to investigation whether Fox and the Murdoch family would wield too much power on the British media landscape as a result of the merger and whether they are “fit and proper” owners who would uphold local broadcasting standards.

The decision is a blow for Fox, which had counted on the deal closing by the end of the year. It now faces a delay that not only puts off its long-desired acquisition of European pay-TV giant Sky but also makes it liable to pay a hefty penalty to Sky shareholders for failing to meet the year-end deadline.

Culture minister Karen Bradley had announced Tuesday that she was “minded to” call in the Competition and Markets Authority to examine the takeover bid on both grounds of media plurality and “fit and proper” ownership, saying she was not wholly satisfied by Fox’s assurances that it would adhere to broadcasting standards. Previously, Bradley had only been inclined to send the bid to the authority for scrutiny of media plurality issues. But since that initial declaration of intent in July, opponents of the deal ramped up their criticism of Fox’s corporate governance track record, particularly allegations of sexual and racial harassment at Fox News and the news channel’s allegedly biased reporting.

On Tuesday, Bradley gave Fox and Sky 10 days to submit more comments or declarations before issuing her final decision on sending the bid to the Competition and Markets Authority. She said Thursday that they had declined to do so.

“Yesterday I received letters on behalf of both parties to the merger confirming that while they disagree with my minded-to decision, they would not be making substantive representations in…

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