U.K. Culture Secretary Approves News Corp.'s BSkyB Deal
Jeremy Hunt has approved plans by Rupert Murdoch's News Corp. to spin off Sky News, clearing the way for its bid for BSkyB.
LONDON -- Culture secretary Jeremy Hunt has approved News Corporation’s bid to acquire full control of BSkyB, on condition that News Corp. spins off the 24-hour news channel Sky News and put it under independent ownership.
The announcement means that News Corp. has successfully avoided the lengthy process of additional regulatory scrutiny, which could have seen the price of a deal ratchet up as the months went by.
The deal, which could still be priced at more than $15 billion, would put Rupert Murdoch in charge of the U.K.’s biggest pay TV platform as well as his existing newspaper portfolio which includes The Times, The Sunday Times, The News of The World and The Sun and international production company Shine Group, he brought last month from his daughter Elisabeth Murdoch.
“The Secretary of State for Culture, Olympics, Media and Sport, Jeremy Hunt, has today announced that, following advice from [media regulator] Ofcom and [competition regulator] the Office of Fair Trading, he intends to accept undertakings from News Corporation on their proposed merger with BSkyB in lieu of a referral to the Competition Commission,” the government said Thursday.
News Corp. said it welcomed the announcement and said that it had offered proposals to protect Sky News from accusations that clearing the deal would reduce overall news plurality in the UK.
“The undertakings provide for Sky News to be spun off as a U.K. publicly traded company, with News Corporation retaining a 39-percent stake. This will preserve Sky News as a distinct media enterprise with a majority of independent directors. [News Corp.] has submitted this comprehensive proposal in order to avoid a lengthy and costly review by the Competition Commission.”
Speaking at a conference in Central London, BSkyB CEO Jeremy Darroch said that he would remain as CEO after the deal and said the steps would protect Sky News.
“Essentially what [hiving off Sky News] does is maintain the status quo, it spins Sky News off as a separate corporate entity, keeping News Corp. as a minority shareholders as it is in BSkyB,” he said, speaking at the FT Digital Media conference, adding that it was “too early” to talk about a pricetag for the deal.
However, a consortium of media companies including rival pay TV platform BT Vision and a consortium of newspapers including The Daily Mailand The Guardian have accused Hunt of a “whitewash” and called for a legal review of his decision.
The announcement from Hunt will now be followed by a 15-day consultation period.