MUMBAI: United Kingdom broadcast regulator Ofcom, on 20 June, submitted a public interest report to the Government on the proposed acquisition of Sky by 21st Century Fox.
In mid-December 2016, Fox stated that Sky had agreed to a takeover offer worth USD 14.8 billion as the media tycoon Rupert Murdoch attempted to create a global media giant across the U.K., U.S, and Europe. Fox said it had reached an agreement with Sky plc on the terms of a recommended pre-conditional cash offer to buy the rest of the European pay broadcaster, beyond the 39 per cent it already owns. The terms of the formal offer, Sky News stated, meant Fox paying 10.75 pounds per Sky share, for the remainder 61% of Sky.
On 16 March 2017, the Secretary of State for Culture, Media and Sport had issued a European intervention notice, which asked Ofcom to report on public interest considerations in respect of plans by 21st Century Fox to acquire the shares in Sky it does not already own.
Specifically, Ofcom was asked to consider whether there would be sufficient plurality of persons with control of the media enterprises; and whether the parties would have genuine commitment to the attainment in relation to broadcasting of standards objectives.
Ofcom has now submitted the public interest report. The Secretary of State will now decide whether to refer the proposed deal to the Competition and Markets Authority for a ‘phase two’ inquiry. The Secretary of State hassaid she intends to announce – by 29 June – whether or not she is minded to refer the merger, and to publish Ofcom’s public interest report at the same time.
Ofcom has an ongoing duty to be satisfied that broadcasting licensees are fit and proper holders of a licence. "This means that we can assess a licensee at any time, on our own initiative, as well as being able to respond to concerns raised by third parties. On 6 March 2017, we announced that we would examine any implications of a change of control over Sky for its holding of broadcast licences. Because, the issues we have considered in the public-interest and fit and proper assessments overlap, we have considered these matters within the same timeframe," Ofcom stated.
"We have today (on 20 June) provided our fit and proper assessment to the Secretary of State. Ofcom will publish that assessment when the Secretary of State announces her ‘minded-to’ decision and publishes the public interest report," Ofcom added.
Proposed merger between Fox and Sky:
Culture Secretary Karen Bradley has confirmed receipt of Ofcom and Competition and Markets Authority reports on the proposed merger between Sky and 21st Century Fox.
In a statement, the Culture Secretary said:
"Today I can confirm that following my intervention in the proposed acquisition of Sky plc by 21st Century Fox Inc., I have received reports from Ofcom on two public interest grounds, and the Competition and Markets Authority (CMA) on jurisdiction, as set out in the European Intervention Notice (EIN) issued on 16th March 2017."
"The EIN issued on 16th March required Ofcom to assess and report to me on two public interest grounds: 1) the need for there to be a plurality of persons controlling media enterprises; and 2) for those carrying on or in control of such enterprises to have a genuine commitment to the attainment of broadcasting standards objectives. It also required the CMA to report to me on jurisdiction. The reports were originally due on the 16th May and, on the 21st April, I extended this deadline to 20th June in light of the announcement of the General Election," she added.
"The decision before me now, which I am required to take acting in a quasi-judicial capacity, is whether - taking account of the specified public interest grounds - it is, or may be the case, that the merger operates, or may be expected to operate, against the public interest and therefore whether or not to refer for a fuller phase 2 investigation by the CMA. I will consider these reports in detail before coming to an initial view on whether or not I am minded to refer the merger," she stated.
