OFT To Investigate ITV Over Multiplex Acquisition
A dark cloud has settled over ITV’s proposed merger with digital multiplex operator SDN, as the Office of Fair Trading (OFT) prepares to investigate the deal, worth £134 million, amid suspicion that it may be uncompetitive.
The merger, announced in April, looked set to further ITV’s growth into the digital arena (see ITV Pays £134 Million For Multiplex Operator). However, the deal to acquire SDN, jointly owned by United Business Media (UBM) and S4C digital media, could now be referred to competition watchdogs, a process which could drag ITV into a lengthy process of investigations and undertakings in order to receive approval for the merger.
A spokesman for the OFT explained the situation, stating: “An invitation to comment has been issued, it’s a standard proceedure that happens when we have to look at a merger situation. Essentially there’s then a deadline for people to send in comments and in this particular situation that is around 40 days.
“Within those 40 days we would aim to have looked at the situation and made a decision – that decision could be that there are no competition concerns. Another possibility could be that the situation is referred to the competition commission, or another possibility could be that the companies provide undertakings in lieu of a referral, so the firms would agree to diverse several assets to head off any competition concerns.”
The deal had been designed to provide ITV with future digital capacity in anticipation of switchover. Commenting at the time of the deal’s announcement, Charles Allen, ITV chief executive said: “Initially ITV will benefit from a new source of revenue, but critically, it ensures that ITV has the opportunity for future capacity on the digital platform where its highly successful family of channels performs best.”
The broadcaster has worked hard in recent months to secure any free capacity available, going head to head with rivals such as Channel 4 over spare Freeview slots and securing a portion of Crown Castle’s remaining terrestrial bandwidth in April (see ITV Scoops Crown Castle’s Extra Freeview Capacity).
ITV: 020 7843 8000 www.itv.com OFT: 08457 22 4499 www.oft.gov.uk