Antitrust body rejects SKT's takeover bid: sourcesMadeinkoreablog
Korea’s antitrust watchdog has rejected SK Telecom Co.’s bid to take over the country’s dominant cable TV operator, citing concerns about a negative impact on normal market competition, industry and government sources said Tuesday.
SK Telecom, the top mobile carrier here, has sought to acquire CJ HelloVision Co., an affiliate of CJ Group, saying it hopes to raise its competitive edge as an all-round media platform operator.
The merger, if realized, would make the company the leading service provider in 21 of the nation’s 23 broadcasting blocs.
SK Telecom wants to merge CJ HelloVision, which has around 4.2 million subscribers, with its cable and internet TV service unit SK Broadband, which has some 3 million IPTV subscribers.
It would sharply narrow the gap with the No.1 TV platform provider KT Corp. with roughly 8.1 million subscribers.
The move has drawn fierce backlash from SK Telecom’s local rivals — KT and LG Uplus Corp. They are worried about the possibility that SK will misuse its TV business to attract internet or mobile phone service customers.
The Fair Trade Commission (FTC) notified SK Telecom of its decision on Monday after reviewing the matter for more than half a year. It’s quite rare for the FTC to put a brake on a local firm’s M&A efforts.
SK Telecom officials are strongly protesting against the FTC’s alleged decision. “It’s a decision hard to understand, which runs counter to market economy,” an official said.
Another official also said the FTC is using an “excessively stringent yardstick” to regulate the market.
Based on the FTC’s opinion, the Korea Communications Commission and the Ministry of Science, ICT and Future Planning will make the government’s final decision on the issue.