21st Century Fox takeover of Sky: European authorities give the deal the green light

 
Oliver Gill
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21st Century Fox founder Rupert Murdoch (right) with Chase Carey who is the former co-chairman of Fox and the new boss of Formula One (Source: Getty)

The European Commission has cleared 21st Century Fox's takeover of Sky, removing a key regulatory hurdle standing in the way of the deal.

The decision comes as part of a twin-track process by UK and European authorities that started with 21st Century Fox referring the deal to Europe last month.

Once notified, as is normal in the case of media transactions, the European Commission referred the case to the UK government, while also conducting its own competition review.

A spokesperson for Sky said: "21st Century Fox welcomes today’s decision by the European Commission clearing unconditionally its proposed transaction to acquire the outstanding shares of Sky that it does not already own.

We now look forward to continuing to work with UK authorities and are confident that the proposed transaction will be approved following a thorough review process.

Read more: Government refers 21st Century Fox-Sky deal to regulators

Who decides on what?

Today's announcement is one of many green lights that needs to be given.

The EC looked at the transaction from a competition perspective only.

Meanwhile the Competition and Markets Authority (CMA) is reviewing it as to whether it even meets certain criteria to qualify as a "merger". If the CMA finds it does meet the criteria, this gives a legal basis for the department for culture, media and sports (DCMS) to look into it at all.

Nevertheless, the DCMS has already referred the deal for review on anticipation that this is the case.

The competition review is only one half of what UK authorities are looking into. The second half is conducted by Ofcom, the media and telecoms regulator.

Read more: Government "minded" to scrutinise Fox takeover of Sky

Ofcom has responsibility to consider the takeover from the perspective of the consumer and whether it could detrimental in terms of ensuring sufficient media plurality – in other words, whether or not the takeover reduces the choice of media outlets available.

Ofcom has 40 working days to respond with its findings and recommendations to DCMS.

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