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BRUSSELS (Reuters) - European Union antitrust regulators approved on Thursday British broadcaster BSkyB's (L:BSY) planned $9 billion takeover of Rupert Murdoch's pay-TV companies in Germany and Italy, which will make it the biggest pay-TV provider in Europe.
The deal is the latest example of traditional entertainment companies reinforcing their operations to compete against internet rivals.
The merged company will have operations in Britain, Ireland, Germany, Austria and Italy. Sky Italia is Italy's biggest pay-TV operator while Sky Deutschland has seen strong growth.
"The Commission found that the transaction would not lead to any material overlaps in the parties' activities, as they are mainly active in different national markets," the EU competition authority said in a statement.
The European Commission also looked into whether the merged company would enjoy increased bargaining power with regard to rights holders for the acquisition of rights to audiovisual content, particularly "premium" content such as certain sport events and films, at the expense of its pay TV competitors.
The Commission found that it was unlikely the merged company would be able to impose a change from current licensing practices, which are focused on national territories or language areas, towards joint purchase or simultaneous negotiations for premium content across several countries.
Under details of the deal announced in July, BSkyB will pay Murdoch's 21st Century Fox (O:FOXA) for the pay-TV companies using cash, debt, its stake in a TV channel and a placing of shares that represents around 10 percent of its issued share capital. Murdoch is also the largest shareholder of BSkyB.
Fox owns 100 percent of Sky Italia, 57 percent of Sky Deutschland and 39 percent of BSkyB.
BSkyB dominates British pay-TV, offering its premium sports, movies and U.S. drama programming to more than 10 million homes.
Facing the toughest market conditions in its 25-year history, BSkyB has decided its future growth lies in creating a European pay-TV leader that will operate in Britain, Ireland, Germany, Austria and Italy.
(Reporting by Foo Yun Chee; Editing by Mark Potter)