EC clears Comcast’s proposed acquisition of Sky

The European Commission has approved unconditionally under the EU Merger Regulation the proposed acquisition of Sky by Comcast, concluding that the transaction would raise no competition concerns in Europe.

Comcast and Sky are mainly active in different markets in Austria, Germany, Ireland, Italy, the UK and Spain. They compete with each other only to a limited extent, mainly in the acquisition of TV content and in the wholesale supply of basic pay-TV channels.

The Commission found that the proposed transaction would lead to only a limited increase in Sky’s existing share of the markets for the acquisition of TV content, as well as in the market for the wholesale supply of TV channels in the relevant Member States.

Given that the merging companies are mainly active at different levels of the market, the Commission’s assessment focused on whether, as a result of the proposed transaction:

• Comcast would be able to prevent or significantly limit access by Sky’s competitors to its films and other TV content or to its TV channels. The Commission concluded that these possible concerns were not founded. This is because pay-TV distributors would continue to have access to content from Comcast’s competitors and multiple alternative channels with comparable programming and audiences in the relevant Member States.
• Sky would have the incentive to cease purchasing content from Comcast’s competitors. The Commission found that this was unlikely as it would reduce the quality of Sky’s product offering.
• Sky could prevent competing channels from accessing its platform. The investigation found that the merged companies’ ability to shut out Comcast’s rivals was significantly mitigated by existing regulations in the UK, Germany and Austria. In addition, competitors that could have been targeted for exclusion are either contractually protected for a sufficient period of time or are not dependent on Sky’s retail platform in the relevant Member States.

Based on the results of its market investigation, the Commission concluded that the proposed transaction would raise no competition concerns.

Comcast’s offer to acquire Sky comes as a counter-bid to an offer by Twenty-First Century Fox.

On April 7th 2017, the Commission also cleared unconditionally Twenty-First Century Fox’s offer for Sky.

In a Statement, the Independent Committee of Sky said it welcomed the announcement, and noted that Comcast has now satisfied all of the pre-conditions outlined in its announcement dated April 25th 2018 and, under Rule 24.1 of the UK Takeover Code, has until Friday July 13th to post its Offer Document to Sky shareholders.

A further announcement will be made as and when appropriate.