ITV broadcasters Carlton and Granada today shrugged off the referral of their proposed £2.9bn (€4.3bn) merger to competition watchdogs.
The two media giants, which together control 12 of the 15 ITV franchises, said the deal was still on track to meet its original timetable with the Competition Commission due to make its report by June 25.
Granada chairman Charles Allen, who will head the new company as chief executive if the deal goes ahead, said: “A united ITV can become a counterbalancing force in British television that can grow in the future and deliver for our viewers, advertisers and shareholders.”
The long-awaited decision to put the case before the Competition Commission comes after the Office of Fair Trading (OFT) cast its eye over the deal, which was announced last October.
City analysts said the decision by Trade and Industry Secretary Patricia Hewitt to refer the deal was fully expected.
The Director General of Fair Trading (DGFT) viewed the merger would raise sufficient questions over advertising competition to merit a full-blown probe.
Ms Hewitt said: “The merger would greatly increase concentration in TV advertising, leaving one firm with more than half of national TV advertising revenue.
“The DGFT therefore considers that the case requires further examination by the Competition Commission to assess whether this increase in concentration is likely to lead to a substantial lessening of competition.”
Advertisers had expressed their concerns that a combined broadcaster would have greater power to set higher advertising prices.
The OFT investigation also concluded that the merger raised secondary questions in relation to potential competition for ITV licences and the supply of studio facilities in northern England.
Under the merger proposals, Granada shareholders will take a 68% stake in the new business and receive £200m (€300m) in cash. Carlton shareholders will hold a 32% share.
Granada owns seven major ITV regional licences – Granada TV, LWT, Yorkshire TV, Tyne Tees TV, Meridian Broadcasting, Anglia TV and Border Television.
It also makes programmes such as A Touch of Frost, Coronation Street, Emmerdale and Stars in Their Eyes.
Carlton Television owns the licence in five regions – London & LNN, Central, West Country, HTV West and HTV Wales.
Its content division has made programmes including Inspector Morse and Survivor.
Carlton chairman Michael Green will chair the new business.