Sky takeover: 21st Century to lodge deal papers with European authorities, firing the starting pistol on regulatory approval process

 
Oliver Gill
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Rupert Murdoch (centre) is the chairman of the Fox News channel (Source: Getty)

Rupert Murdoch's 21st Century Fox will take one step closer to sealing its takeover of Sky by lodging documents with European authorities this week.

Fox is expected to ask Brussels to approve the deal, a move that starts the clock on 10-day window for culture secretary Karen Bradley to open an investigation into the £11.7bn bid to take control of the shares in Sky it does not own.

Read more: Murdoch swoops: 21st Century Fox agrees Sky takeover deal

If, as expected, Bradley decides to review the deal, she will hand it over to regulator Ofcom and competition authorities. The watchdog will have 40 working days to prepare its analysis and report back to government.

Ofcom reviewed the last incarnation of Murdoch's attempt to take control of Sky in 2011. The regulator raised concerns over "media plurality" of bid by News Corporation to buy the part of BSkyB it didn't already own.

But the deal collapsed before a final decision was made by the government, under the weight of the phone hacking scandal at some of News Corporations print publications such as the News of the World.

On the latest deal, a cross-party group of politicians have called Ofcom to review whether Sky chairman and Fox chief executive James Murdoch meets the UK broadcasting licence "fit and proper" test.

Different political climate

Experts expected the takeover may run more smoothly this time. Howard Cartlidge, the head of EU and competition at law firm DWF said:

An investigation by Ofcom is likely. But given the very different political climate we’re operating in today, I’ll be surprised if the deal isn’t cleared this time

"Not only is the phone hacking scandal receding into history, but a much-weakened Labour party is unlikely to exercise much influence on the government, which may also be anxious to retain Murdoch support for its Brexit policy."

Read more: 21st Century Fox takeover of Sky unlikely to be blocked, say media analysts

One of the plurality concerns raised by Ofcom in 2011 was the combination of Sky News with News Corporation's print titles. At the time, this led to reports Sky was planning spin-off its news channel will a separate float on the Aim.

And while Sky News would be part of the latest deal, Cartlidge did not foresee a similar requirement. He said: "Ownership of Sky News is arguably less critical now, given how many other sources of news exist today – and the case for this is even stronger than it was in 2011.

Meanwhile, the settlement provisionally reached for the last bid for Sky – which provide for the separation of Sky News from NewsCorp's newspaper interests - has effectively already happened through the split of 21st Century Fox and 'new' NewsCorp.

Bradley declined to speculate on what she would do if and when Fox formally kicked off the process.

“Until a formal notification is made to the appropriate authorities it’s impossible for me to make any judgement at all," she told the BBC.

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