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Nicholas Grove is a Morningstar journalist.

Rupert Murdoch's News Corporation (NWS) has been given the green light by the Australian competition regulator to buy billionaire James Packer's Consolidated Media Holdings (CMJ).

The $2 billion, $3.50-a-share deal would give News Corp 100 per cent of Fox Sports and 50 per cent of pay TV provider Foxtel. News already owns 25 per cent of Foxtel and half of Fox Sports.

In a statement, Australian Competition and Consumer Commission (ACCC) chairman Rod Sims said the acquisition "is unlikely to lead to a substantial lessening of competition in any relevant market".

"Given that News Corporation has no interests in other free-to-air or subscription television entities in Australia, the ACCC considered that the proposed acquisition was unlikely to materially change News Corporation's incentives in relation to the supply of content in Australia," he said.

The ACCC said it is continuing to assess the proposed acquisition of 100 per cent of the shares in CMJ by billionaire Kerry Stokes' Seven Group Holdings (SVW). SVW currently holds a 24 per cent stake in CMJ.

In late June, SVW informed the ACCC it was actively considering acquiring further shares in CMJ and asked the ACCC to review a proposal for an acquisition of all of the shares in CMJ.

Morningstar head of equities research Peter Warnes recently said the future of News Corp's $3.50 cash offer for CMJ lies not with James Packer and/or Kerry Stokes, but in the hands of small shareholders.

"If News Corp is bidding $3.50 per share, in our opinion, it is worth considerably more," Warnes said.

"We urge shareholders to think independently and not be influenced by James Packer's description of a 'fair' offer as his motives and attention is aligned with Crown (CWN) and Echo Entertainment (EGP).

"His CMJ shareholding would release $984 million of much-needed cash to pursue his casino aspirations."