(Adds quote, background on proposed merger)
Dec 7 (Reuters) - Australia's competition watchdog on Thursday dropped its opposition to a proposed merger of Fox Sports and Foxtel after finding the deal would not "substantially lessen competition."
Fox Sports is owned by News Corp NWSA.O , which also owns Foxtel jointly with Australia's Telstra Corporation Ltd TLS.AX .
The Australian Competition and Consumer Commission "will not oppose this merger after finding that the commercial incentives of Foxtel, Fox Sports, News, and Telstra will not be substantially altered," ACCC Chairman Rod Sims said in a statement.
Under the merger, Foxtel and Fox Sports will be brought together under common ownership, with News Corp holding 65 percent of the merged entity and Telstra owning the remaining 35 percent.
"An important consideration was that consumers will still be able to access Foxtel's digital products even if they acquire broadband or mobile services from Telstra's competitors," Sims added.
Foxtel is Australia's largest supplier of subscription television services. Fox Sports operates a number of 24/7 sports channels that are shown on Foxtel and in licensed venues.