The Competition Authority has cleared the €325 million takeover of NTL Ireland by Chorus parent UGC, but attached 19 stringent conditions to its approval.
The conditions are expected to be met by UGC, although the deal still requires the approval of the Minister for Enterprise, Trade and Employment, Micheál Martin. It is understood the 19 conditions are the most the authority has ever attached to a takeover sanction.
UGC Ireland is ultimately owned by Liberty Global, which is controlled by American tycoon John Malone.
Because he also owns shares in News Corporation, which owns a significant stake in BSkyB, major competition issues were triggered by the deal. BSkyB is the main digital television rival to Chorus and NTL in the Irish market.
In a statement yesterday, the authority said: "The conditions attached to this transaction are designed to address concerns relating to the cross-ownership interests held in other media businesses by a number of directors of Liberty Global including John Malone, the leading shareholder in Liberty Global."
The statement added: "The Competition Authority was specifically concerned about cross-ownership interests linked to News Corporation and BSkyB."
While the Competition Authority makes its determination on competition grounds, the minister may make his findings based on separate, non-competition criteria. If the minister makes no order within 30 days, the determination of the Competition Authority is final.
The authority's main aim in each investigation is to ensure no proposed acquisition will "substantially lessen competition" in markets for goods or services in the State.
Under the conditions attached to the NTL deal, Liberty Global must create a holding company for its interests in Ireland but no directors from Liberty Global can become directors of this company.
There will be an independent member of this holding company. That person will be Colm Duggan, a partner in the Dublin solicitors' firm Arthur Cox, who is the external corporate law adviser in Ireland to Liberty Global. He will make sure the new arrangements followed.
This corporate structure will be put into place within 30 days of the final approval of the proposed acquisition. The board of the holding company will be responsible for the day-to-day management of the Irish business. Dealings with BSkyB will rest with the management and board of this holding company.
Liberty Global will forward to the board of the holding company copies of resolutions taken by the Liberty Global board in relation to decisions which specifically concern Liberty Global's business in Ireland.
The principal operations of Chorus are in cable television and it is the second-largest provider of these services in the State. It offers retail analog and digital pay television services for residential customers in Ireland, excluding Dublin, Galway, Waterford and some surrounding areas. NTL's main franchise areas are Dublin, Galway and Waterford.
