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UK: Sky takeover blocked by competition watchdog

By  |  January 23, 2018
UK: Sky takeover blocked by competition watchdog

21st Century Fox, owned by media mogul Rupert, Murdoch has been blocked by the UK’s competition watchdog from completing a full buyout of Sky. The media tycoon, who also a range of newspapers including The Times, The Sunday Times and The Sun, launched a £11.7 billion (US$14.6 billion) takeover bid by Fox in December of 2016. If successful, it would give the Murdoch family full control of Sky News, as well as the company’s extensive TV, internet and phone businesses in the UK. The Competition and Markets Authority (CMA) rejected the idea, however, due to “media plurality” concerns, or how much power the resulting company would have over public opinion.

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    “We have provisionally found that if the Fox/Sky merger went ahead as proposed, it would be against the public interest,” Anne Lambert, chair of the independent investigation group said. “It would result in the Murdoch family having too much control over news providers in the UK, and too much influence over public opinion and the political agenda.” Murdoch already holds a 39% stake in Sky. He tried to buy the remaining piece in 2010, but abandoned the deal after News Corporation (which is now 21st Century Fox) was swept up in a hugely damaging phone hacking scandal.

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    The CMA is consulting on its decision and has proposed business “remedies” that could change its mind, such as a spin-off or divestiture of Sky News, thereby limiting the impact of a takeover. These are unlikely to appeal to Murdoch and 21st Century Fox, however. The CMA is worried that banning the transaction would encourage Sky to close Sky News — if the company’s newsroom disappeared, the concerns about “media plurality,” or a journalistic monopoly, would arguably go with it.

    Full Content: The Wall Street Journal

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