21st Century Fox has formally notified the European Commission of its intent to fully acquire pay-TV provider Sky, and it’s already sensing some pushback from regulators.
“We note the statement issued by the Secretary of State following formal notification of the proposed transaction. As we have previously indicated, we anticipate regulators will undertake a thorough review of the transaction, and we look forward to engaging with them as appropriate. We believe the combination of 21st Century Fox and Sky will create a company best suited to compete in a rapidly evolving industry, and are confident that the transaction will be approved based on a compelling fact set,” said a 21st Century Fox spokesperson in a statement.
The statement in question, issued today by the U.K.’s Secretary of State for Culture Media and Sport Karen Bradley, suggested a European Intervention Notice may be required since public interest considerations—as set out in the Enterprise Act 2002—that are relevant to this proposed merger warrant further investigation.
In particular, issues of media plurality and broadcast standards were cited as reasons for a deeper look at the merger.
“The first public interest ground on which I am minded to intervene is media plurality. That is, specifically, the need for there to be a sufficient plurality of persons with control of the media enterprises serving audiences in the U.K.,” said Bradley in a statement. “The second public interest ground on which I am minded to intervene is commitment to broadcasting standards. This ground relates to the need for persons carrying on media enterprises, and for those with control of such enterprises, to have a genuine commitment to attaining broadcasting standards objectives.”
Bradley noted that she will not make a final decision to intervene before receiving further written explanations from the companies by March 8.
“I also want to be clear on what this means in terms of the overall process. Any decision to intervene is not the end of the matter. Instead, it would recognize these public interest considerations may be relevant to the merger and will trigger action by Ofcom to assess and report to me on them and for the Competition and Markets Authority to report on jurisdiction. There would then be a further decision-making stage for me to undertake, in light of these reports. But we are not at that stage yet,” Bradley added.
21st Century Fox in December announced its intent to buy the roughly 60% of Sky it doesn’t already own in a deal that would value the operator at around $23 billion. Fox previously made a bid to fully acquire Sky but that effort was dashed in the light of revelations that two of Fox owner Rupert Murdoch’s newspapers were hacking into the mobile phones of celebrities and politicians.
At the time of the December announcement Sky said the companies had “reached agreement on an offer price of £10.75 [$13.52] per share in cash” but warned that “certain material offer terms remain under discussion and there can be no certainty that an offer will be made by 21st Century Fox, nor as to the terms of any such offer.”