Britain clears way for News Corp's BSkyB deal

3rd March 2011, Comments 0 comments

The British government cleared the way on Thursday to approve News Corporation's bid to win control of broadcaster BSkyB, after it offered to spin-off the Sky News operation to address competition concerns.

"The Secretary of State for Culture, Olympics, Media and Sport, Jeremy Hunt, has today announced that ... 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 in a statement.

"The undertakings that News Corporation has offered would involve Sky News being 'spun-off' as an independent public limited company."

Hunt, who also launched a consultation over the deal on Thursday, will announce his final decision on March 21.

Rupert Murdoch's News Corp. has offered to spin-off Sky News as a new company, with shares distributed among existing BSkyB investors.

News Corp, which currently owns 39.1 percent of BSkyB, would retain the same stake in the new company, which would have a board made up of a majority of independent directors.

News Corp. had been waiting on Hunt's decision over whether to refer its £7.5 billion ($12.2 billion, nine-billion-euro) bid for the 61 percent of BSkyB shares it does not already own to competition authorities.

"I am consulting on proposed undertakings from News Corporation. Informed by advice from the regulators, I believe that these will address concerns about media plurality should the proposed News Corporation/BSkyB merger go ahead," Hunt said in the statement.

"The undertakings offered would ensure that shareholdings in Sky News would remain unchanged, and indeed offer it more independence from News Corporation than it currently has."

© 2011 AFP

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