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Korean antitrust body delivers final nay to SKT-CJ HelloVision merger

Collected: 2016.07.19

Distributed: 2016.07.20

Source: Go Direct

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South Korea’s Fair Trade Commission (FTC) made a final decision to disallow SK Telecom Co. from owning cable TV content provider CJ HelloVision Co. on the grounds that the merger would hurt fair competition in the market.

The antitrust body announced on Monday that it concluded to ban stock trade between SK Telecom and CJ HelloVision for the latter’s merger with SK Broadband Co.

SK Telecom struck a deal with CJ HelloVision on November 2nd last year to acquire a 30 percent stake in CJ HelloVision and merge SK Telecom’s subsidiary SK Broadband with CJ HelloVision, and sought business approval on December 1st.

The FTC opposed the takeover bid, claiming the new broadcasting entity would dominate 21 out of 23 jurisdictions. The merger would widen the gap with the second biggest service provider by 6.7 percentage points to 58.8 percentage points in 17 jurisdictions, impeding fair market competition.

The antitrust watchdog was concerned that the predominance could spike cable TV subion rate. CJ HelloVision already charges most in areas where it is the dominant player.

The merger would also damage competition in the mobile communication market as SK Telecom is the top mobile carrier and CJ HelloVision is number one in budget phone service, the government body said.

SK Telecom and CJ HelloVision said that they would respect FTC’s decision and will focus on normalizing their businesses.

By Na Hyun-joon

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