Sky’s $2.1 Billion ITV Megadeal: U.K. Regulators Get Gov’t Green Light for Investigation

Now it is official. The U.K. government has filed an intervention notice into the planned $2.1 billion takeover of ITV’s TV networks and streaming assets by Comcast‘s Sky, U.K. Culture Secretary Lisa Nandy said on Wednesday. That means she is asking regulators Ofcom and the Competition and Markets Authority (CMA) to formally investigate the deal.

While Ofcom’s review will focus on the proposed merger’s public interest impact, the CMA will review it from a competition perspective.

The ITV-Sky deal promises to bring together Britain’s largest pay-TV operator with its largest commercial free-to-air broadcaster. Sky CEO Dana Strong called it “a defining moment for British media.” ITV CEO Carolyn McCall touted it as the creation of “a U.K. champion with the scale and resources to better compete with global streaming platforms.” But critics have expressed concerns about the merged entity’s market power. And the U.K. Labour Party government previously cited concentration worries, with Nandy saying she was “minded to intervene.”

On Wednesday, Nandy shared that the companies had submitted their reactions to the expressed concerns. “Having fully considered their representations, I have decided to issue a Public Interest Intervention Notice,” a so-called PIIN, Nandy said in parliament.

In a statement, Nandy’s office outlined several key reasons for a public interest deal review, including “the need for free expression of opinion in news media,” the goal of “a sufficient plurality of views in news media in each market for news media in the United Kingdom or a part of the United Kingdom,” and “the need for the availability throughout the United Kingdom of a wide range of broadcasting and on-demand programs.”

ITV agreed to sell its media and entertainment arm to Sky for £1.6 billion in July. The deal covers ITV’s terrestrial TV channels and streaming service ITVX. Production arm ITV Studios would continue operating as a separate company.

Sky is led by CEO Dana Strong. It not only operates pay-TV and streaming businesses in the U.K., Ireland and Italy but also has been growing its telecom offerings, such as broadband and mobile phone operations. Sky also owns the production arm Sky Studios, which is led by Cécile Frot-Coutaz and has been growing its investment in original content creation. Recent Sky Studios productions have included the likes of Mary & George, starring Julianne Moore; The Tattooist of Auschwitz, starring Harvey Keitel; and The Day of the Jackal, starring Eddie Redmayne. Comcast acquired Sky in 2018.