UK Government Approves News Corp's BSkyB Takeover

The UK government approved News Corp.'s proposed GBP7.8 billion takeover of British Sky Broadcasting Group after the media giant agreed to spin off 24-hour news channel, Sky News, into a separate company to avoid a prolonged investigation by the nation's competition regulator.

The deal, which will add BSkyB's extensive pay-television operations to News Corp.'s extensive stable of media operations, has been criticized by UK rivals, who said it would hurt competition and limit media choice for consumers. But the UK government, which was reviewing the merger to see if such concerns were valid, said News Corp.'s proposal to spin off Sky News allayed its concerns and it therefore approved the deal, subject to a short public consultation. Once approval is confirmed, News Corp. and BSkyB will start negotiating on price, although BSkyB Chief Executive Jeremy Darroch refused to speculate about a bid price.