Murdoch's £11.7bn Sky takeover referred to competition regulator
Blow to Rupe as deal will be subject to further investigation
The proposed £11.7bn takeover of Sky by Rupert Murdoch's 21st Century Fox has been referred to the Competition and Markets Authority regulator today.
Culture secretary Karen Bradley announced the decision after considering an investigation into the takeover by the media watchdog Ofcom, which found the deal might influence the "overall news agenda" and the entity's ability to "influence the political process".
Bradley said that on the basis of Ofcom’s assessment she was minded to refer the deal to a six-month investigation by the CMA on the grounds of media plurality.
She said: "The reasoning and evidence on which Ofcom’s recommendation is based are persuasive. The proposed entity would have the third largest total reach of any news provider - lower only than the BBC and ITN - and would, uniquely, span news coverage on television, radio, in newspapers and online."
Ofcom’s report states that the proposed transaction would give the Murdoch Family Trust material influence over news providers with a significant presence across all key platforms, said Bradley.
"This potentially raises public interest concerns because, in Ofcom’s view, the transaction may increase members of the Murdoch Family Trust’s ability to influence the overall news agenda and their ability to influence the political process and it may also result in the perception of increased influence."
Fox currently owns 39 per cent of Sky and during Murdoch’s previous bid in 2011, with former culture secretary Jeremy Hunt having initially given the full takeover the green light. However, that deal later collapsed when Murdoch was forced to withdraw his bid amid public outrage over phone hacking at the News of the World.
Sky said in an update to the stock market that it would continue to engage with the process as the Secretary of State reaches her final decision.
“In the meantime, Sky welcomes today's announcement of Ofcom's decision that Sky would continue to be a fit and proper holder of its broadcast licences under full ownership of 21CF and will continue to operate its business as usual," it added. ®