EU regulators clear News Corp bid for BSkyB

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Moves by Rupert Murdoch's News Corporation to take control of BSkyB cleared a key hurdle today following approval from European regulators.

News Corp, which owns The Sun and The Times, wants to buy the 61% stake of the broadcaster it does not already own for £7.8 billion.

The European Commission (EC) approved the deal, but the group still faces the scrutiny of UK industry regulator Ofcom, which will decide by December 31 whether to refer the bid to the Competition Commission.

Joaquin Almunia, EC vice-president and commissioner for competition, said: "I am confident this merger will not weaken competition in the UK. The effects on media plurality are a matter for the UK authorities."

Ofcom's report will be sent privately to Business Secretary Vince Cable and he will publish his own report and decision in the new year.

The plans were referred to Ofcom on public interest grounds amid fears the deal involving the Sky News owner posed a threat to media plurality.

But BSkyB, which welcomed today's decision, previously said rejecting the bid on the grounds of it reducing the number of independent voices in the market "could perversely increase the risk of that very situation".

The EC said the deal would not impede effective competition in Europe, in both the broadcast and print media, and the advertising sector.

Mr Cable said: "Whilst it has found there are no issues on competition grounds, the EC's decisions on this are independent from the outcome of the separate UK investigation into the merger's potential impact on the sufficiency of media plurality within the UK.

"Ofcom are due to report into this separate matter by the end of this month. I will review their findings once Parliament returns and I will then take the decision on whether this case needs to be referred to the Competition Commission for a full investigation."

In June, BSkyB rejected News Corp's 700p-a-share approach - which values the FTSE 100 Index company at around £12 billion.

BSkyB said the proposal significantly undervalued the business and called for an offer in excess of 800p a share when it was approached in June.

But despite their differences over price, the two parties agreed to work together on the regulatory process required for a tie-up.