Rupert Murdoch's News Corporation withdrew from its takeover bid for British Sky Broadcasting Group PLC on Wednesday as the recent phone-hacking scandal involving company structures continues to gain momentum.
News of the World, a popular British tabloid and part of Murdoch's media empire, had to close due to a phone tapping scandal on July 10, after 168 years in print.
"News Corporation announces that it no longer intends to make an offer for the entire issued and to be issued share capital of British Sky Broadcasting Group PLC ("BSkyB") not already owned by it," Sky News cited a statement issued by the company.
Deputy chairman Chase Carey added the company feels it would be "too difficult to progress in this climate."
The European Commission gave the green light to News Corp.'s bid to buy the remaining 61% of BSkyB last year, but the merger was stalled by U.K. media regulator Ofcom. As the scandal unrolled, many British political forces declared they were against the deal.
British Prime Minister David Cameron said on Wednesday News Corporation should sort out the phone tapping scandal first.
"What has happened at the company is disgraceful, it's got to be addressed at every level and they should stop thinking about mergers when they've got to sort out the mess they've created," he said.