News Limited moved a step closer to gaining what analysts say will be high-earning pay TV assets when it won regulatory approval for its acquisition of Consolidated Media.
The Australian Competition and Consumer Commission (ACCC) on Thursday said it did not think competition was at risk and it would not oppose the $2 billion deal.
The deal would enable Mr Murdoch to take control of ConsMedia's 25 per cent stake in pay TV provider Foxtel and its half of Fox Sports.
News already owns 25 per cent of Foxtel and half of Fox Sports.
Consmedia is controlled by James Packer, whose last remaining media interest would be with the Ten Network if the sale goes ahead.
ACCC chairman Rod Sims said the watchdog believed the acquisition was unlikely to lead to a substantial lessening of competition in any relevant market.
"The ACCC noted that News Corporation already owns 50 per cent of Fox Sports Australia," Mr Sims said in a statement.
"Given that News Corporation has no interests in other free-to-air or subscription television entities in Australia, the ACCC considered that the proposed acquisition was unlikely to materially change News Corporation's incentives in relation to the supply of content in Australia."
Citi analyst Justin Diddams said he thought Foxtel and Fox Sports would be cornerstone assets in News Corporation's proposed demerged publishing business.
News Corp plans to split its assets into separate publishing and media-entertainment divisions.
However its Australian arm News Limited will be a separate entity as part of the publishing arm, meaning the Consmedia assets would contribute to that.
Goldman Sachs believes Consmedia's earnings would add two per cent to News Ltd's earnings per share.
Billionaire Kerry Stokes' rival offer for ConsMedia through Seven Group Holdings is believed to hold more competition concerns for the ACCC, who have requested more information about the planned bid.
Seven Group owns the free-to-air Seven Network and already holds a 24 per cent stake in the Packer-controlled ConsMedia.
News Limited is regarded as a more natural acquirer of Consmedia, with analysts saying Mr Stokes' conflicting media and mining services investments would come to a head.
Seven also carries as much as $1.8 billion of debt before it gets into a bidding war with News Limited.
Consmedia shares finished one cent up at 3.44, while News Ltd stocks lifted five cents to $22.03.
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