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European Union

EU Regulators Signal Approval for News Corp's $10.6 Billion BSkyB Bid

Strategic Insights

— 1 min read

Regulators in Brussels are poised to approve News Corporation's £7.8 billion bid to acquire the remaining 61% of British Sky Broadcasting (BSkyB), despite concerns about media plurality and the potential for a single company to dominate the UK's TV advertising market. The European Commission has found no significant competition problems with the deal, but the final decision is still subject to review. If approved, the acquisition would give News Corp, led by Rupert Murdoch, control over Sky News, Sky Italia, and Sky in the UK.

Key Takeaways:

  • The European Commission has not found any significant competition problems with News Corp's bid to acquire BSkyB.
  • The investigation has focused on antitrust issues, specifically the potential for a single owner to dominate the TV advertising market in the UK.
  • BSkyB has argued that its Sky News channel has a small share of national TV news viewing, around 7%, and has invested in it as a distinct, impartial, and independent news service.
  • Ofcom, the UK regulator, is conducting a separate probe into the impact on media plurality and is due to submit a report to the Government by December 31.
  • Concerns have been raised about the potential for "bundling" of television and newspaper products, where the combined group could offer bundled packages that would create a monopoly.
  • News Corp has offered concessions to address concerns, but it appears that these may not be necessary if the deal is approved.

Statistics:

  • The value of News Corp's bid for BSkyB is £7.8 billion ($10.6 billion).
  • The combined group would have a dominant share of the UK's TV advertising market.
  • BSkyB's Sky News channel has a 7% share of national TV news viewing.
  • Ofcom has a deadline of December 31 to submit a report to the Government on the potential impact of the deal on media plurality.
  • The European Commission has a deadline of December 22 to report on the impact of the proposed deal.

Sources:

  • "News Corp wins battle for Sky" by LOUISE ARMITSTEAD, REGULATORS in Brussels have signalled that they are preparing to hand a major victory to Rupert Murdoch's News Corporation in its £7.8bn bid to take over the rest of BSkyB by declaring that the deal would not be anti-competitive within the European Union. (Source: LOUISE ARMITSTEAD, REGULATORS in Brussels)

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