News
Korea’s Fair Trade Commission says merger would create TV monopoly.
SK Telecom’s plan to acquire pay-TV provider CJ Hellovision was dealt a blow on Tuesday when South Korea’s Fair Trade Commission (FTC) rejected its bid.
According to a Korea Herald report, the antitrust regulator’s seven-month assessment concluded that the proposed merger would impede competition because it would create the biggest TV provider in 21 of the country’s 23 broadcasting regions, effectively giving SK Telecom a monopoly.
SK Telecom launched its bid for CJ Hellovision in November 2015.
Under the terms of the transaction, SK Telecom agreed to pay 500 billion won (€398.2 million) for a 30% stake in CJ Hellovision held by CJ O Shopping. It would also have the option to acquire CJ O Shopping’s remaining 23.9% stake in CJ Hellovision via call and put options.
Upon completion, SK Telecom planned to merge CJ Hellovision and its fixed-line unit SK Broadband via a stock swap.
The Korea Communications Commission (KCC) and the Ministry of Science, ICT and Future Planning (MSIP) have the final say over whether to approve the deal; nonetheless, the FTC’s decision has cast doubt over the deal’s future.
SK Telecom’s rivals doubtless cheered the FTC’s decision.
LG Uplus and KT Corp were staunchly opposed to the tie-up, insisting that it would harm competition by combining the country’s biggest telco and TV players.
"The FTC’s decision is a shocking case for SK Telecom," said SK Telecom, in Tuesday’s Korea Herald report.
The company is said to be reviewing the FTC’s assessment and will draw up a response. According to the report, its options include filing a legal challenge against the FTC’s decision.
