Fox Acquisition of Sky

21st Century Fox has been planning to acquire or takeover of Sky, which has dominated news reports in the recent past. While the plan for the deal has been ongoing for sometime, it has faced several challenges that have caused delays. The delays in the conclusion of the deal have particularly been centered on sexual and racial harassment allegations surrounding Fox News. The acquisition of Sky by 21st Century Fox has looked more vulnerable in the aftermath of the General Election because of investigations into these allegations by Ofcom (Turvill, 2017). Ofcom has been investigating whether 21st Century Fox would be deemed as a fit and proper owner test in light of the claims of racial and sexual harassment. The investigations would also look into whether the takeover would hurt the media plurality in the United Kingdom, which is considered as an important component of the nation's broadcast media sector. In light of the increased calls for the blockage of the deal by the public, it is largely expected that Ofcom's report, which will be released next week, would block the conclusion of the acquisition. However, others have argued that the deal is likely to go through despite the significantly low public confidence, but after some delays.

The news report regarding the challenges facing the proposed Fox-Sky deal highlights some of the major issues relating to mergers and acquisitions as discussed in this course. The proposed Fox-Sky deal is an example of horizontal acquisition given that these two companies operate in the same industry i.e. media. The major reason for the proposed acquisition of Sky by 21st Century Fox is for creation of synergy, which has generated concerns on its potential impacts on media plurality in the United Kingdom. However, when creating synergy during mergers and acquisitions, both companies need to be deemed fit and proper in order to prevent probable negative consequences of the deal once its concluded. In this case, the proposed acquisition was faced with some procedural issues because of the allegations surrounding Fox, which had significant impacts on its reputation. In essence, the situation in the proposed deal between Fox and Sky has been characterized by some procedural issues that are common in mergers and acquisitions. It's important for firms involved in a merger or acquisition to be passed fit and proper in order to avoid procedural issues.

Reference

Turvill, W. (2017, June 18). Ofcom due to Report Back on 21st Century Fox-Sky Deal After Tory General Election Flow Adds Uncertainty. City A.M. Retrieved June 19, 2017, from http://www.cityam.com/266870/ofcom-due-report-back-21st-century-fox-sky-deal-after-tory