CMA delay verdict on 21st Century Fox takeover of Sky

When it was first announced that 21st Century Fox were proposing to take over Sky, there were murmurs in the business world of potential Competition problems.

And those murmurs may become reality.

The free flowing of competition between businesses is a key focus for many countries and regions, such as the UK and EU. In order to ensure competition is not purposely restricted or controlled in anyway the UK have a competition watchdog, the Competition and Markets Authority (CMA).

As part of their role, the CMA investigate any mergers of businesses which may allow the business to dominate the market and restrict competition.

If a business is found to be restricting competition, there are serious consequences, The CMA can impose a fine of up to 10% of a company’s worldwide turnover, which can be a ridiculous amount if some of the world’s biggest corporations are involved.

One of the CMA’s current cases may be no exception as it involves some of the biggest news corporations.

21st Century Fox which is controlled by Rupert Murdoch and his sons is a spin off from News Corporation which was founded by Murdoch in 1979.

The corporation’s assets include the Fox News channel and tv network as well as 20th Century Fox film studio.

It also currently owns a 39% stake in Sky PLC.

The increase of this stake is the issue at hand.

21st Century made a £11.7 billion proposed bid for the remaining 61% stake in Sky, rendering them with full control.

If the takeover was to go ahead, the combination of the two corporations would cloud the news market.

As expected, the CMA stepped in and have been investigating the effect of the takeover, following a referral by Karen Bradley, the Culture Secretary.

It was expected they would return with their preliminary view on the matter by 18th December 2017.

However, this has now been delayed until mid-January 2018.

The CMA have cited this delay as a direct result of the large volume of evidence submitted which included 12,000 submissions and a large number of face-to-face-hearings.

The Murdochs’ are waiting eagerly the result as they are planning on selling the Sky stake to Disney.

It will be interesting to see how the CMA will rule and whether the future Disney plans will also be a problem.Â

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