Fox–Sky Takeover: Government clears bid, if Sky News is sold
The saga of 21st Century Fox’s bid to take over Sky may be coming to a close as Culture Secretary Matt Hancock clears the path for a deal on the basis that Sky News is sold to a suitable buyer.
Fox’s £11.7 billion ($14.6 billion) bid was first launched in 2016. The deal was referred to a ‘phase two’ investigation last June by former Culture Secretary Karen Bradley after it was cleared by the European Commission.
A report from Ofcom concluded a deal involving Sky News would result in Fox owner Rupert Murdoch’s family having "increased influence" over the UK's news agenda and political process.
In January, the CMA declared Murdoch’s Sky takeover is “not in the public interest” in a provisional ruling. The investigation focused on two areas in particular: media plurality, and commitment to broadcasting standards.
The CMA found no issue with regards to broadcasting standards “due to their existing track record in the UK, and the range of policies and procedures the companies involved have in place to ensure broadcasting standards are met.”
However, the CMA echoed Ofcom’s concern about the reduction of media plurality in the UK if the deal was allowed to go ahead.
As part of its decision, the CMA had to provide suggestions as to how their concerns could be alleviated. The remedy proposed was for Sky News to be sold to a suitable buyer. Fox proposed divesting Sky News to Disney.
"I agree with the CMA that divesting Sky News to Disney, as proposed by Fox, or to an alternative suitable buyer, with an agreement to ensure it is funded for at least ten years, is likely to be the most proportionate and effective remedy for the public interest concerns that have been identified.
"The proposals include significant commitments from Fox. But there are some important issues on the draft undertakings which still need to be addressed.
They include Sky News' long-term financial viability, its ability to operate as a major UK-based news provider; and its ability to take editorial decisions independently, ‘free from any potential outside influence’.”
The culture secretary hasn’t ruled out still blocking the deal if terms cannot be agreed.
"I am optimistic that we can achieve this goal, not least given the willingness 21st Century Fox has shown in developing these credible proposals," said Hancock. "However, if we can’t agree terms at this point, then I agree with the CMA that the only effective remedy now would be to block the merger altogether. This is not my preferred approach."
21st Century Fox is not the only bidding party for Sky. Comcast has put in a £22 billion ($16.47 billion) bid for the company that has already been cleared after Hancock said the proposal did not "raise concerns in relation to public interest considerations" that would require intervention.
Do you agree with the government’s decision? Let us know in the comments.
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