Sales arms may go in TV merger

TV GIANT Granada today hinted that it is prepared to make huge concessions to push through a merger with rival Carlton.

Chairman Charles Allen said he would consider selling the advertising arms of both companies if that is what it takes to win approval for the merger from the Department of Trade and Industry. However, he admitted that such a move could undermine the whole purpose of the deal.

'If the Government requires divestment of both sales houses we will have to see if we can make that work,' Allen wrote in The Times newspaper. ''s ever, the devil will be in the detail, but we believe that double divestment significantly undermines the rationale of the deal.'

Trade Secretary Patricia Hewitt aims to deliver her verdict on the proposed tie-up by the week beginning 6 October.

One of the key issues to be decided is whether Granada and Carlton will be forced to sell one or both of the advertising arms. Advertisers fear the combined company would be able to dictate exorbitant prices for commercial time.

The Competition Commission has also considered other remedies. One option would prohibit the network from charging ever-higher fees for shows with declining audiences.

Allen said a close partnership with Carlton would remain crucial, even if the planned tie-up does not go ahead.

'Even if the merger does not go through, we have clearly crossed the Rubicon and there can be no turning back on the benefits being achieved through close collaboration between Carlton and Granada,' he said.