U.K. gives the OK for Fox to buy Sky — as long as it sells Sky News
The U.K. government is clearing the path for 21st Century Fox to acquire European satellite TV company Sky, but there's one big condition — Fox has to sell Sky News.
Fox has a $24.7 billion dollar bid on the table for Sky, which is Europe's largest pay-TV company. Sky, already part-owned by Fox, is also considering a $30.1 billion bid from Comcast, owner of NBCUniversal. The government cleared Comcast's bid without further examination.
The country's Competition and Markets Authority had previously recommended the proposed deal be blocked, but has considered potential remedies suggested by the Rupert Murdoch-backed Fox.
Culture secretary Matt Hancock spoke to parliament on Tuesday and said he agreed with the country's competition authority that "divesting Sky News to Disney, as proposed by Fox, or to an alternative suitable buyer, with an agreement to ensure it is funded for at least ten years, is likely to be the most proportionate and effective remedy for the public interests concerns that have been identified."
Sky is a U.K.-based satellite broadcaster with 22.5 million subscribers in the U.K., Ireland, Germany, Italy and Australia. It generated GBP12.9 billion ($17.2 billion) of revenue in 2017.
Murdoch helped create Sky when satellite television was in its infancy. Several attempts by Murdoch to own the balance of Sky have been thwarted in the past after other Murdoch-backed companies ended up embroiled in scandals — including the phone hacking scandal at British newspaper News of the World, which at the time was part of Murdoch's News Corporation.
"The proposals include significant commitments from Fox. But there are some important issues on the draft undertakings which still need to be addressed," Hancock added.
Fox is in the midst of a deal to sell many of its assets to Walt Disney Co., including its 39 percent holding in Sky.