Australia's Foxtel wins US$2.06b Austar takeover

Foxtel, the Rupert Murdoch-linked Australian pay-TV provider, on Tuesday won its US$2.06 billion bid for regional television operator Austar, after the competition watchdog gave its consent. Foxtel, owned by Telstra Corp., Consolidated Media Holdings and Murdoch's News Corp., made its offer for Austar United Communications in 2011, saying it hoped to create one of Australia's largest media businesses with the merger. The Australian Competition and Consumer Commission (ACCC) said Tuesday it would not oppose the acquisition after accepting court-enforceable undertakings from Foxtel. These prevent Foxtel from acquiring exclusive Internet protocol television (IPTV) rights for a range of popular television programmes and movie content, or exclusively buying any movies delivered via video-on-demand. Under the undertakings, in place for eight years, Foxtel is also barred from buying exclusive mobile rights to television shows and movies where the rights are sought by its rivals in combination with IPTV rights. "The proposed acquisition would bring together the two main subscription TV industry players in Australia, each with a substantial customer base and significant access to key content," ACCC chairman Rod Sims said. "By reducing content exclusivity, the undertakings will lower barriers to entry and promote new and effective competition in metropolitan and regional telecommunications and subscription television markets." Sims said that with the undertakings offered by Foxtel, the ACCC was satisfied that the proposed acquisition was "unlikely to substantially lessen competition". The takeover is expected to be finalised by late May. The ACCC's green light comes weeks after News Corp. was hit by charges that it used hackers to undermine security systems used by On Digital in Britain, and also sabotaged Austar and Optus in Australia. Murdoch has shrugged off the reports as "lies and libels" but they have added to pressure on his media empire, which is under siege over a phone-hacking scandal in Britain.