Ericsson AB’s proposed takeover of Red Bee Media Ltd. was referred for an in-depth antitrust review by the U.K. Office of Fair Trading, which said the deal may lead to higher prices for some services for broadcasters.
The deal may lead to higher prices or worse service among linear playout providers, who ensure television programs are lined up and ready for broadcast, the OFT said in a statement. The OFT asked another regulator, the Competition Commission, to take an additional look at the transaction.
Ericsson, the largest maker of wireless networks, agreed in July to buy London-based media services company Red Bee Media from a group led by Macquarie Advanced Investment Partners LP. It didn’t disclose a purchase price.
“Not only is there the possibility of price rises as a result of the merger, there is a risk the most complex channels will suffer a reduction in quality in their service levels,” said OFT Chief Executive Officer Clive Maxwell.
Ericsson said in a statement that it will work to address the OFT’s concerns.
Red Bee Media’s customers include British Broadcasting Corp., phone company BT Group Plc, pay-television provider British Sky Broadcasting Group Plc and the MTV unit of Viacom Inc.