South Korea’s Fair Trade Commission (FTC) has effectively rejected SK Telecom’s (SKT’s) controversial acquisition of cableco CJ HelloVision, reports Yonhap News Agency, citing industry and government sources. With SKT having announced plans to acquire a 53.9% stake in CJ HelloVision back in November 2015, with a view to merging it with its wholly-owned fixed line unit SK Broadband, a prolonged review of the deal has been undertaken by the FTC after protests from rival operators such as KT Corp and LG Uplus, which contended that the deal could hamper competition.
It is understood that the FTC informed SKT of the decision through its secretariat yesterday (4 July), and the operator has already expressed its displeasure, with one official cited as saying: ‘It’s a decision hard to understand, which runs counter to market economy.’ For its part, CJ HelloVision called the ruling ‘very regrettable’, with a statement from the cableco adding: ‘It’s the worst review outcome, as the future of the cable TV industry is taken into account … It’s a measure to put (the company) at the risk of collapse by blocking pre-emptive and voluntary restructuring of the cable TV industry.’
With the FTC said to have sent a document to SKT outlining its position, the latter now has a few weeks to examine this and submit its opinion on the matter. Subsequently, the FTC will convene a plenary session at which it will set out its final position on the merger. Based on the FTC’s opinion, meanwhile, the Ministry of Science, ICT and Future Planning (MSIP) is then expected to make a final decision on the proposed transaction in consultation with the Korea Communications Commission (KCC).