Ericsson's Red Bee deal green-lit

The majority decision clears the way for Ericsson to complete its takeover of the media services company, which provides playout, subtitling, channel branding and promos for the likes of the BBC, Channel 4 and UKTV.

Ericsson, which acquired Technicolor’s playout business in July 2012, already counts ITV and NBC Universal among its clients.

The deal to acquire Red Bee, which was announced in July, was referred to the Competition Commission in September amid fears it would reduce competition in the playout sector.

The Competition Commission today said that ITV’s position was unlikely to be significantly weakened by the merger, due in part to uncertainty about the state of the playout sector and the potential for “significant” changes in technology during its contract with Ericsson.

ITV and Ericsson have agreed a “long-term” extension to their current playout agreement, which is conditional on the completion of the deal.  

The BBC’s playout contract with Red Bee expires in 2017, but the Competition Commission said it was unlikely that the merger would have an adverse effect on the BBC because of the way that the BBC plans to conduct the tender process at the end of its arrangement with Red Bee.

It also said rival firms would be able to “exert the same level of competitive constraint” on Red Bee in spite of the deal.

Smaller broadcasters were unlikely to be significantly affected by the deal as it believes there is enough choice of other playout providers, it found.

The Competition Commission is expected to publish its final report by 11 May.