Carlton, Granada given merger go-ahead

The government has today announced that it is allowing Carlton and Granada to go ahead with its plans for a £4 billion merger.

The merger - formally proposed one year ago - was pitched on the basis that it would solve the "current dysfunctionality within ITV," as well as bringing "significant" cost savings to the network.

There had been some concern that a consolidated ITV would have unfair dominance of the UK TV advertising market, leading to speculation that the competition commission would require both Carlton and Granada to divest their respective sales houses.

Announcing her agreement of the commission's findings today, Trade and Industry secretary Patricia Hewitt said that they would not have to sell of the sales units, but would be subject to some strict conditioning.

The so-called "CRR remedy" - standing for "contract rights renewals" - will bring in an independent watchdog to oversee the new company's advertising rates.

Other merger concerns related to the four regional ITV franchises not operated by Carlton or Granada, all of whom could suffer at the hands of a larger ITV network company.

The measures for protecting these regions have not been spelled out today in detail, although Hewitt noted that they would have to be in place by November, and before the merger can go ahead technically.

"I am confident that the merged company will be able to compete more effectively with the BBC, Channels 4 and 5, and BSkyB," added Hewitt. "Technological and regulatory developments have changed the broadcasting landscape and the position of ITV has become increasingly difficult to maintain.

"A stronger ITV will be better able to invest in and provide programming of high quality, including regional programmes. Broadcasting as a whole will benefit. This outcome would be consistent with the de-regulatory reforms we have made in the Communication Act 2003 which removed the regulatory barriers to a single ITV."

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