Sky has agreed to a takeover bid from Rupert Murdoch’s 21st Century Fox for £11.7bn in a deal that could create one of the most powerful media groups in the UK.

The deal, which shareholders will still have to vote on, comes five years after the media tycoon’s last tilt at taking full control of the business through News Corporation.

Mr Murdoch, who owns The Sun and The Times newspapers, will now need to gain regulatory approval for the deal, which values Sky at more than £18bn, amid concerns he will have excessive influence over UK media.

Fox has not raised the initial offer of £10.75 per share from Friday last week.

Some shareholders, including Standard Life Investment and Jupiter Asset Management, had been sceptical about the bid, given the links between the boards of directors of Sky and 21st Century Fox.

Thomas Moore, investment director at Standard Life Investments which owns Sky shares, told the BBC that “this can’t be an arms-length deal”, because of Murdoch’s involvement in both companies.

“There’s heavy representation of people aligned with Rupert Murdoch, not just James Murdoch,” he said.

Mr Murdoch’s son James is both chairman of Sky and chief executive of Fox.

21st Century Fox said: “The strategic rationale for this combination is clear.

“It creates a global leader in content creation and distribution, enhances our sports and entertainment scale, and gives us unique and leading direct-to-consumer capabilities and technologies.

“It adds the strength of the Sky brand to our portfolio, including the Fox, National Geographic and Star brands.”

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Culture Secretary Karen Bradley will have 10 days to decide whether to refer the deal to the media regulator, Ofcom. The key issue is whether the deal would damage media plurality.

The agreement would consolidate Murdoch’s control on UK TV as well as print media, in addition to his US media interests, which include the Fox New TV channel and The Wall Street Journal.

Ofcom will have up to 40 working days to file its public interest report on the deal, assuming Bradley asks the media regulator to investigate.

Labour deputy leader Tom Watson, who pursued News Corporation in parliament over phone-hacking by the News of the World, has called on Ms Bradley to refer the bid to Ofcom.

He said: “The secretary of state must refer the bid to Ofcom, to assess whether it would result in too much media power being concentrated in too few hands, and whether Rupert and James Murdoch are ‘fit and proper persons’ to run a broadcaster.

“Labour’s position has been consistent throughout; the Government cannot be allowed to ditch the vital second part of the Leveson Inquiry, which would look at questions around unlawful or improper conduct within the Murdoch empire, at exactly the moment when Rupert Murdoch is attempting once again to strengthen his hold over the UK media.”

Vince Cable, the former business secretary who referred Murdoch’s previous 2010 bid for a public interest test, said last Friday: “The way Theresa May’s government deals with this is a test of their independence from the influence of large proprietors.”