ITV giants Carlton and Granada are bracing themselves for the long awaited verdict of Patricia Hewitt, Secretary of State for Trade and Industry, on their proposed merger.
The two companies announced their intention to join forces last autumn (see
Carlton And Granada Enter Advanced Merger Talks) and believe that the move will enable them to make annual savings of up to £55 million. However, they have encountered considerable opposition from advertisers and rival broadcasters whose main beef is that a single ITV company would control more than half of the UK television advertising market and could distort competition.
The merger was referred to the Competition Commission in March (see ITV Merger Referred To Competition Commission) and the findings of this body will go a long way towards determining whether it is passed by the authorities.
Hewitt could give Carlton and Granada the green light or simply block their plans. However, it is likely that a structural or behavioural solution or a combination of the two will be implemented. It has been suggested that the two companies be allowed to merge on condition that they to divest their sales houses (see Carlton And Granada May Have To Sell Sales Houses) or agree to maintain existing advertising rates.
A decision from the Department of Trade and Industry is expected next week. It is bound to have a significant bearing on the future of the commercial TV market and the attractiveness of ITV to foreign investors.
