UK regulators approve ITV mergers
The decision to allow Carlton Communications, United News & Media (UNM) and Granada Media to conduct their proposed mergers effectively relaxes the government's rules that no one entity can control more than 25% of the UK television advertising market. Carlton proposed merging with United News and Media (UNM) last year, but Granada has also expressed an interest in buying out either of its rivals. The Commission had raised concerns that the various merger proposals would adversely affect competition for advertisers in ITV, Britain's commercial television network, in which Carlton, Granada and UNM all dominate.
The commission did raise concerns that a merger between Carlton and UNM would harm the public interest but gave conditional approval if the two companies sold their interests in Meridian, an ITV affiliate, within six months of the completion of the merger.
"The UK media scene has changed radically since the early 1990s," said Stephen Byers, Dept. of Trade and Industry Secretary. "It is important that we allow ITV to develop in a way which allows it to compete effectively in an increasingly diverse market. My decisions today should ensure that there is effective competition in the ITV sector, protecting the interests of viewers, advertisers and programme makers."
All three companies agreed in 1994 not to exceed 25% of all TV net advertising revenue, but the government's decision releases them from that agreement. However in order to protect small ITV franchises, Byer is seeking agreements from three companies that they will give six months notification should they choose to change sales house.
The decision could spark a bidding war among the companies as they attempt to gain a dominant position in the ITV network. Granada has been preparing itself for such a move by divesting its hospitality division and floating its television business – Grenada Media – into a pure media play.
Edited by Tom Butts