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‘Sky Europe’ formation closer after EU approval

The European Commission has approved BSkyB’s takeover of its 21st Century Fox pay TV cousins Sky Deutschland and Sky Italia.

The Commission said the merger would not cause competition concerns after assessing its impact on rival services and the wider market.

the fact each company operated solely in its own market meant “the transaction would not lead to any material overlaps in the parties’ activities”.

Furthermore, the Commission found “it was unlikely that the merged company would be able to impose a change from current licensing practices” – meaning it was doubtful ‘Sky Europe’ would seek to score multi-territory licence premium rights for the three companies.

In any case, the Commission said distributors were unlikely to go for such deals.

“Finally, even assuming that rights owners were to license rights on a pan-European basis, the merged entity would in any event face competition for multi-territory rights from a number of multinational groups which already operate in the European Economic Area,” it added.

Cumulatively, this meant the transaction would not cause competition concerns, the Commission said.

On July 25, BSkyB confirmed it was set to pay £2.9 billion (US$4.93 billion) in cash for a 57% stake in Sky Deutschland and £2.45 billion for 100% of Sky Italia through a £2.07 billion cash offer and transferring its 21% stake in National Geographic Channel, which is worth £382 million.

It has also offered to buy the stock of Sky Deutschland’s remaining shareholders to bring the business completely under its control, though has said it can achieve its objectives for the German company without a 100% stake.