Britain refers Murdoch deal after concessions withdrawn

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The British government Monday referred a bid by Rupert Murdoch's News Corporation for BSkyB to competition regulators after the media giant withdrew concessions it had offered to push through the deal.

The government had indicated it would approve News Corp.'s bid for the 61 percent of satellite broadcaster BSkyB that it did not already own, after News Corp. agreed to hive off the Sky News channel to assuage competition concerns.

But ministers had come under sustained political pressure in recent days to block the bid because of the phone-hacking scandal at the Murdoch-owned News of the World, which caused the tabloid to close at the weekend.

Minutes before Culture Secretary Jeremy Hunt was due to update the House of Commons on the affair, News Corp. announced it was withdrawing its concessions and saying it was willing to engage with the Competition Commission.

"News Corporation today announces that it is withdrawing its proposed undertakings in lieu of reference to the Competition Commission with respect to its proposed acquisition of BSkyB," the group said in a statement.

"Should Jeremy Hunt decide on this basis to refer the proposed transaction to the Competition Commission for a detailed review, News Corporation is ready to engage with the Competition Commission on substance.

"News Corporation continues to believe that, taking into account the only relevant legal test, its proposed acquisition will not lead to there being insufficient plurality in news provision in the UK."

When Hunt stood up shortly afterwards in the House of Commons to give lawmakers an update on the situation over phone hacking and BSkyB, he responded decisively to News Corp's announcement.

"As a result of News Corporation's announcement this afternoon I am now going to refer this to the Competition Commission with immediate effect and will be writing to them this afternoon," Hunt said.

© 2011 AFP

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