Rupert Murdoch’s attempted £11.7bn takeover of Sky is to be further delayed after the Culture Secretary referred it to competition regulators.
Karen Bradley has asked both Ofcom, the communications watchdog, and the Competition and Markets Authority, to investigate the implication of 21st Century Fox’s bid for the British satellite broadcaster.
In a statement to the House of Commons, Mrs Bradley said that she has issued a European intervention notice on the grounds of “media plurality and commitment to broadcasting standards” as a result of the bid from Fox, which Mr Murdoch's family trust owns 38.4pc of.
Separately, Ofcom will also launch a review to see whether Fox is a ‘fit and proper’ owner to take over Sky.
Fox already owns 39pc of Sky, but is hoping to gain full control.
Fox launched its tilt for Sky in December, offering £10.75 a piece for the 61pc of shares it does not already hold.
In January, Fox and Sky started lobbying MPs about plans for the controversial merger, in the hope of staving off political opposition to increased Murdoch control of Britain’s dominant pay-TV operator.
The merger is seen by some as controversial because it would give the Murdoch family greater control of the UK media landscape. Through News Corporation, in which the family controls a 39.4pc voting stake, they already control The Times, Sunday Times, and The Sun as well as radio group TalkSport.
Some MPs have warned that the deal could dilute competition and also lead to editorial changes at Sky News.Fox News, Fox’s US rolling news channel, is seen as highly partisan and some believe the takeover could lead to a similar style at Sky News, despite British broadcasters having to adhere to Ofcom’s strict impartiality rules.
Mrs Bradley said she had received more than 700 letters from third parties over the merger, the vast majority of which called for the Government to intervene.
“While representation from Fox highlighted areas where it contested the position, none of the representations have led me to dismiss the concerns I have,” she told MPs.
“It is important and appropriate for me to seek comprehensive advice from Ofcom on public interest considerations and from the CMA on jurisdiction issues.”
This is not the first time the Murdoch clan has attempted a takeover of Sky. Six years ago, before Fox and News Corp were split into two, the larger News Corp had its ambitions for a merger thwarted by the political fallout from the phone hacking scandal.
The Times and Sun newspapers and their stake in Sky were at the time part of the same company, triggering a full Ofcom investigation.
Sky already has three Fox executives on its board including James Murdoch, who is chairman as Sky as well as chief executive of Fox.
A Fox spokesman said: “We are confident that a thorough review of our track record over 30 years will underscore our commitment to upholding high broadcast standards, and will demonstrate that the transaction will not result in there being insufficient plurality in the UK.
“The media market has changed dramatically in recent years, as has our business. We believe our proposed £11.7bn investment will benefit the UK’s creative industries. We look forward to continuing to work with all stakeholders and are confident that the transaction will be approved.”
It is understood that Fox still expects the deal to close by the end of the calendar year. Sources close to the company said the media landscape and the structure of the company had changed since 2010, which made it less likely to be opposed by regulators.