UK trade and industry secretary Stephen Byers has paved the way for consolidation of the ITV commercial broadcast network by clearing the proposed merger between TV companies Carlton Communications and United News & Media, and a possible rival bid for either from Granada Media.
However, Byers said he would only allow the Carlton-United merger if United sold its regional Meridian TV franchise. The stipulation to sell Meridian comes after the Competition Commission said that a merger between Carlton and United acted against public interest.
The government also lifted the ceiling on TV advertising revenues that each company can earn but left legislation on audience share untouched. Culture Secretary Chris Smith followed Byers' ruling by announcing that he would ease restrictions on holding multiplex TV licenses and abolishing the digital points system. The move effectively allows one company to own Carlton and Granada's digital platform, ONdigital.
The latest decision clears the way for two players, rather than the current three, to dominate the commercial ITV network. Carlton, Granada and United are now expected to battle for control, although today's verdict may also prompt the three companies to come to an agreement on a deal.
Carlton and United agreed a merger last year but Granada responded to the move by announcing its possible interest in one of the companies so as not to be isolated. Granada this month floated its media division Granada Media, raising a $2bn (£1.3bn) war-chest for any bid.