After a year-long investigation, the Competition Commission has finally given the all-clear to the £2.5bn sale of to Australian investment bank , which owns rival transmissions firm Arqiva.
But the regulator said last night that the coming together of the two groups "would lead to a substantial lessening of competition", and that both companies would have to agree to a package of measures designed to protect the interests of the television and radio stations.
Arqiva provides the transmission networks for ITV, Channel 4, Five and the vast majority of commercial radio, including the national digital radio multiplex, Digital One.
National Grid Wireless, counts the BBC as its biggest broadcast client and is one of the founding shareholders in Freeview.
The Competition Commission has told both companies to immediately cut the prices they charge radio broadcasters by 17%, and to provide a 3.25% discount for analogue and digital TV broadcasters.
Other measures include the appointment of an independent adjudicator to resolve disputes, and the renewal of existing broadcast contracts on the same prices and terms as those currently in place.
Diana Guy, who chairs the Competition Commission's inquiry group, said: "We are very conscious that this is a unique situation given the critical importance of digital switchover.
"This decision is dependent on satisfactory undertakings being agreed and, if suitable undertakings cannot be agreed, we will require a substantial divestment."
Since Macquarie approached National Grid Wireless in April last year with a £2.5bn takeover offer, the two companies have been subject to a "hold separate" arrangement, forcing them to continue operating as two standalone companies until competition issues are resolved.
Tom Bennie, Arqiva chief executive, said: "We are pleased to have concluded this major part of the process and we hope the merger can now proceed as planned.
"This merger will bring significant benefits to the broadcasting industry. By unifying the transmission infrastructure, we'll be able to pass on savings to customers and, crucially, deliver digital switchover but in a more efficient manner and with greater financial certainty."
Broadcasters had expressed concerns that the bringing together of Arqiva and National Grid Wireless would create an unacceptably powerful monopoly which would be harmful at a time when the television and radio industries are ploughing money into digital switchover.
In its submission to the Competition Commission inquiry, the commercial radio trade body, the , said: "Currently our members face a strong duopoly in which the only bargaining power they have arises from the presence of the alternative operator on the market.
"If this merger were to proceed this bargaining power would be lost and our members would face a very strong, vertically integrated monopoly with no incentive to maintain current levels of prices and service, to invest in research and development."
Responding to yesterday's ruling, the RadioCentre said this morning that it looked forward to "examining rigorously the terms and conditions of the deal", and noted the immediate 17% discount for radio stations.
Ofcom has announced it is likely to conduct its own separate review of the transmissions market in the wake of the Arqiva and National Grid deal.
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