UK: What the election means for Fox’s Sky deal

The shock UK election result has increased the risk that 21st Century Fox’s planned takeover of broadcaster Sky could be scuppered by political opposition.

Shares in Sky fell as much as 4% on Friday as investors worried that the strong performance by the left-wing Labour Party could slow — or even block — the £18.5 billion ($23 billion) deal championed by Rupert Murdoch.

Labour, which has opposed the massive media takeover, gained seats in parliament following Thursday’s election. Prime Minister Theresa May’s Conservative Party saw its majority wiped out. May is now trying to form a minority government.

Broadcasting regulator, Ofcom, is currently reviewing whether or not to approve Fox’s purchase of Sky, in which it already holds a 39% stake. It is due to complete its review by June 20.

“Had the Conservatives won a large majority, we think it would have been more straightforward to approve the deal relatively quickly,” said Polo Tang, head of European telecom research at UBS. “We still see scope for the deal to be approved but the risks around an extended review have increased,” he added.

Full Content: Hollywood Reporter

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