Matt Hancock, the Culture secretary, has commented that the bid of Fox for a further consultation, but has also cleared Comcast’s rival bid to take over Sky.
The decision has paved the way for a bidding war which was worth billions of dollars between Comcast and Fox to complete a takeover of Sky.
Ever since 2016, Fox has been chasing for approval from UK regulators to buy the 61% of Sky which it does not already own.
The takeover was held up by politicians and regulators who were fearing that it could give Rupert Murdoch too much influence over the media in the UK.
The Murdoch-controlled Fox has been attempting to address those concerns through a series of concessions, including selling Sky News to Disney once the deal is complete.
Whereas, Disney has struck a deal to buy Fox’s entertainment assets, including its stake in Sky.
However, US media giant Comcast waded into the bidding in February with a £22bn offer for Sky, trumping Fox’s offer, which valued the broadcaster at £18.5bn.
It was said by Hancock that he needed to be confident that the final undertakings ensured the continuation of Sky News’s long-term financial viability, and that it could continue to operate as a major UK-based news provider making independent editorial decisions.
He said, “As a result, I have asked my officials to begin immediate discussions with the parties to finalise the details with a view to agreeing an acceptable form of the remedy, so we can all be confident Sky News can be divested in a way that works for the long-term. I am optimistic that we can achieve this goal, not least given the willingness 21st Century Fox has shown in developing these credible proposals.However, if we can’t agree terms at this point, then I agree with the CMA that the only effective remedy now would be to block the merger altogether. This is not my preferred approach.”
Fox said: “We now look forward to engaging with the Department for Culture, Media and Sport (DCMS) and we are confident that we will reach a final decision clearing our transaction.”
In a statement, Sky said it has welcomed the announcement and it has also noted that Mr Hancock felt that undertakings provided by Fox were a “good starting point to overcome the adverse public interest, effects of the proposed merger that he has identified”.
Tom Watson, the Shadow culture secretary, said that the approval of both bids “means that this is not the end of the story. The Labour’s priority going forward was to “safeguard the future of Sky News” which is a “beacon for independent and rigorous journalism”.
“Were the Fox/Disney deal to fail it could leave Sky News isolated from Sky and owned by a foreign company with few news interests in the UK. It’s hard to see how that would be in the public interest,” he further added to his statement.