In its final report on the merger, the Competition Commission said the£2.5bn cash deal would lead to a 'substantial lessening' of competition in the provision of broadcast transmission services to TV and radio broadcasters.
The merger combines Arqiva, a subsidiary of Macquarie-owned Macquarie UK Broadcast Ventures Limited, and NGW. Together, the companies own around 50% of the transmission masts used by TV and radio stations in the UK.
"The CC has concluded that the loss of rivalry between them could be expected to lead to higher prices and lower service quality," the Commission said in a statement, confirming provisional findings published in Nov 2007.
In order to safeguard competition, the Commission outlined a series of measures it said the merged entity must agree to. These include price reductions for customers on new and existing contracts and the appointment of an adjudicator to resolve disputes.
"The CC has decided that the proposed measures will be effective in addressing the adverse effects of the acquisition, whilst preserving the benefits that could arise from the acquisition, including reducing the risks associated with the digital switchover process and passing back cost savings to customers,' the regulator added.
If 'suitable undertakings' cannot be agreed, the Commission said it would order a 'substantial divestment' of the NGW's broadcast and mobile phone mast business.
The proposed measures also includes an immediate price discount of 17% to all radio broadcast customers plus an annual audit of digital switchover costs.
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