21st Century Fox Bid for Sky Is Provisionally Rejected by U.K. Regulator

LONDON — Britain’s competition regulator provisionally rejected on Tuesday a bid by 21st Century Fox to take control of the British satellite broadcaster Sky on the grounds that it was “not in the public interest,” it said in a statement.

The regulator, the Competition and Markets Authority, had been assessing whether the $16.3 billion deal, announced in December 2016, would negatively affect media plurality in Britain and whether it would affect broadcasting standards in the country.

The regulator said on Tuesday that it had rejected the proposed deal “due to media plurality concerns” and that, as a result, it “provisionally concludes that the proposed transaction is not in the public interest.”

The decision by the regulator, the latest complication in what has been a protracted battle by 21st Century Fox to take over the 61 percent of Sky that it does not already own, means that the fate of the bid is now in the hands of Britain’s culture minister, Matt Hancock, who must rule by May 1.

In a statement, 21st Century Fox said it was “disappointed by the C.M.A.’s provisional findings.” But it welcomed the regulator’s ruling that the deal would not affect broadcasting standards, and said it still expected the takeover to win regulatory approval by the end of June.

In a separate news release, Sky noted that while the merger had been provisionally rejected on media plurality grounds, the regulator had “set out possible remedies relating to these concerns, and is seeking submissions on these.”

Rupert Murdoch, executive chairman of the American media company, has long coveted total ownership of Sky, which he founded in the early 1990s. But the media mogul is a divisive figure in Britain, and a previous bid for Sky was withdrawn amid the hacking scandal that engulfed his British newspaper division.

The future of the deal had in any case been thrown into question by Mr. Murdoch’s surprise decision to sell most of 21st Century Fox last month.

The sudden sale, to the Walt Disney Company, had been seen as an admission by Mr. Murdoch that the business climate for traditional Hollywood companies was getting tougher, and that such companies would have to get larger in order to compete with digital titans like Amazon, Apple, Facebook, Google and Netflix in the realm of online video.

That had appeared to be the initial rationale for 21st Century Fox’s bid for Sky. The American company had sought to keep pace with younger rivals, which were using streaming services to win over customers who have become increasingly accustomed to watching movies and television shows on mobile devices and tablets.

In that vein, Sky offered 21st Century Fox not only a Pan-European satellite network, but control of Now TV, Sky’s online streaming service. European Union antitrust authorities approved the deal in April, saying it raised no competition concerns in Europe.

Content originally published on https://www.nytimes.com/2018/01/23/business/media/sky-21st-century-fox.html by PRASHANT S. RAO