Italy's Antitrust Authority has frozen the deal which would have seen Rupert Murdoch's News Corp sell Italian pay-tv platform Stream to Vivendi Universal.
The two media giants reached an agreement last month after News Corp bought Telecom Italia's 50% share of Stream for Euros 48m. The move enabled News Corp, which already owned the other 50%, to sell Stream to Vivendi, paving the way for Vivendi's Telepiu' to become the only pay-tv outfit operating in Italy.
The Italian watchdog body announced its decision on Friday (March 1), as it officially opened an investigation the deal, which would see Vivendi acquire Stream for a reported Euros 545m.
The Antitrust Authority's move is intended to stop the two sides from undertaking any pre-acquisition measures, such as merging employee groups, until it has either approved or blocked the operation. Similar measures, it fears, could lead to a merger between the two groups becoming effective before the authority has taken its decision, creating too big a hurdle for potential competitors.
Authority head Giuseppe Tesauro will announce his decision in 45 days.
While many still expect the deal to get regulatory approval, both Telepiu and Stream are believed to have informed the watchdog that if the deal is blocked, one of the pay-tv platforms will have to pull out of the market.