Takeovers on cards after media free-up

CANBERRA - Plans to free up Australia's media ownership rules passed the upper house Senate yesterday and are set to become law, clearing the way for a possible spate of takeovers in the A$12 billion ($13.7 billion) industry.

The reforms are designed to free up media ownership by scrapping foreign ownership limits and cross-media rules which ban a company from owning television, radio and newspapers in the same area.

The new ownership laws will be debated in the lower House of Representatives from next week, where the Government has enough votes to ensure the laws can pass without the need for further changes. The laws will take effect from 2007.

Communications Minister Helen Coonan told the Senate the changes would modernise Australia's media ownership laws.

"It is important that we find the balance in terms of providing the scope for media companies to respond to emerging pressures, but at the same time respond to concerns about competition, diversity and local content."

Following Tuesday's amendments, the Government has imposed a two out of three rule, ensuring no single owner can hold all three kinds of media companies in the same market.

The new laws will scrap 20-year-old foreign investment limits which prevented a foreign investor from owning more than 15 per cent of a television station or 25 per cent of a newspaper.

But foreign takeovers or investment above 5 per cent will still need to be approved by the Treasurer and Foreign Investment Review Board.

The laws also guarantee at least five separate media groups remain in the main cities, and at least four media groups remain in a regional market.

- REUTERS