South Korea’s Fair Trade Commission (FTC) yesterday rejected SK Telecom’s (SKT) bid to acquire the country’s largest cable TV company, CJ Hellovision, over concerns the merger will curb market competition.
A final decision on the bid will be made by the Korea Communications Commission and the Ministry of Science, ICT and Future Planning based on the FTC’s opinion, Yonhap reported. The news agency said it was rare for the FTC, which reviewed the case for more than six months, to reject a local company’s M&A efforts.
SKT, the country’s largest mobile operator with a 48 per cent market share, announced in early November plans to acquire CJ O Shopping’s 30 per cent stake in CJ Hellovision for KRW500 billion ($440 million). Merging its SK Broadband unit, with about three million IPTV subscribers, with CJ HelloVision, which has about 4.2 million subscribers, would narrow the gap with rival KT, with 8.1 million users on its TV platform.
But after months under review, the operator had prepared for the possibility that its bid could be blocked. In a filing with the New York Stock Exchange in April, SKT acknowledged that it may not succeed in completing the acquisition as the deal may not be given government approval.
The country’s number two and three mobile operators – KT and LG Uplus – teamed up in late November to oppose SKT’s plan. The two operators argued the deal would hurt market competition given SKT’s dominant position in the mobile sector.
A merger would give SKT 21 of the country’s 23 broadcasting blocs, Yonhap said.