The head of the U.S. Federal Communications Commission said on Friday he is urging the agency to approve Liberty Media's acquisition of News Corp's stake in DirecTV.
FCC Chairman Kevin Martin said he is currently circulating a proposal among the other four commissioners to vote on during the acquisition at its next meeting on February 26. This will allow the transfer of control of DirecTV from Rupert Murdoch's News Corp. to John Malone's Liberty Media.
I have proposed the commission move forward with the News Corp.-DirecTV-Liberty Media transfer-of-control application, Mr. Martin said.
He confirmed that he would vote to approve the transaction that has been awaiting FCC and Department of Justice approval the deal that was first struck in December 2006.
News Corp. agreed to exchange its 41 percent stake in DirecTV, worth approximately $11 billion, for Liberty Media's 16.3 percent voting stake in News Corp, pay $550 million in cash and give three regional sports networks to News Corp.
Liberty Media had been steadily increasing its stake in News Corp., making it the second-largest shareholder in News Corp. This led to speculation that it was preparing to launch a hostile takeover bid.
Through the transaction, News Corp.'s Rupert Murdoch aims to preserve the family control over the company, and to rid himself of his interest in DirecTV control.
The deal ended two years of negotiations and conflicts between long-time associates and rivals Rupert Murdoch and John Malone, who once helped rescue News Corp from hitting bankruptcy.
The U.S. Justice Department also has to approve the deal.