Liberty Media's acquisition of News Corp.'s stake in DirecTV cleared a major hurdle on Monday as U.S. regulators conditionally approved the deal.
The Federal Communications Commission said the agency had voted to allow the deal to go forward after concluding that "as conditioned, the public interest benefits of the (deal) outweighed the potential harms."
As a condition for approval, the FCC required Liberty and DirecTV, the top U.S. satellite television provider, to continue to abide by program access and other requirements the agency previously imposed on News Corp. to preserve competition.
In addition, the FCC required that Liberty "sever" the common ownership of Liberty cable systems in Puerto Rico and DirecTV operations there within one year.
DirecTV issued a statement lauding the approval. "We welcome Liberty Media as our largest shareholder and we look forward to breaking ground on this exciting new chapter at DirecTV..." a representative of DirecTV said.
News Corp. struck a deal in December 2006 to swap its controlling stake in DirecTV for Liberty's stake in News Corp, which the companies earlier expected to close in the second half of 2007.
The deal calls for News Corp. to transfer its controlling stake in DirecTV, $550 million in cash and three regional sports networks for Liberty Media's 16.3 percent stake in News Corp.
The transaction amounts to an $11 billion stock buyback for News Corp.
The deal ends two years of negotiations between long-time associates and rivals, News Corp. Chief Executive Rupert Murdoch and Liberty Media Chairman John Malone.
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