NTL Cedes to Clan Murdoch, Retreats from ITV Merger

06 December 2006

LONDON: Another victory for Clan Murdoch as UK-based American cable operator NTL officially withdrew from merger negotiations with ITV - Britain's largest commercial broadcaster. The catalyst for the retreat was the purchase three weeks ago of a 17.9% stake in ITV by the Murdoch controlled BSkyB satellite monopoly.

The stake, worth in the region of £940 million ($1.86bn; €1.39bn), effectively means that Clan Murdoch can veto any deal of which it does not approve - and BSkyB would most certainly not welcome the powerful competition posed by a merged NTL-ITV.

In a statement NTL confirmed it had lodged an official complaint with the Office of Fair Trading, citing "serious competition issues".

"The fact that Sky would spend nearly $2bn to acquire its stake immediately following the mere announcement of NTL's proposed combination, before the ITV board had an opportunity to respond, highlights the magnitude of the competition issues involved."

Sir Richard Branson, NTL's biggest shareholder by dint of its takeover of Virgin Mobile earlier this year, has attacked the power of Rupert Murdoch and urged the government to "stand up" to him.

A forlorn hope in the eyes of many, given the dependence of the Blair (or any alternative) administration on the electoral support of Murdoch-owned media, which in aggregate represent over 35% of UK newspaper readership.

NTL, which will change its name to Virgin Media early next year, says it will now refocus on integrating its NTL and Telewest cable businesses and the Virgin Mobile division.

Data sourced from BBC Online; additional content by WARC staff