Carlton, United News to Merge

Carlton Communications and United News & Media said that they plan to merge in a $6.5-billion deal that would create Britain’s biggest commercial television company and a force to compete internationally in a rapidly consolidating media market.

The merger also would increase competition in Britain for Rupert Murdoch’s pay-TV giant BSkyB in the fight for rights to key sports events and viewers in a market where the number of channels is multiplying.

The new company would broadcast the Independent Television Network, Britain’s most-watched TV station, to 65% of British homes. However, the deal would require a change in Britain’s television regulations.

The Office of Fair Trading in July began a review of the limit on a company controlling more than 25% of TV advertising revenue, a regulation that was put in place in 1994. The companies have submitted arguments that the limits should be increased and United News Chief Executive Clive Hollick said in an interview he expects the regulator to decide within seven to eight weeks.

“This will be completed subject to the OFT’s review in that time period,” he said.