Delayed gov’t approval for M&A hurts SKB, CJHV

[THE INVESTOR] The delayed merger and acquisition deal between IPTV operatorSK Broadband and cable TV firm CJ HelloVision is wreaking havoc on both companies, hampering them from proceeding with their investment plans to beef up infrastructure and services.

“As the review session for the M&A among the government bodies is being delayed, SKB is struggling to execute investment plans, which sequentially causes damage to its equipment suppliers and other partners,” a public relations representative from SKB said.

Lee In-chan, chief executive of SK Broaband. SKB

SKB, a subsidiary of mobile carrier SK Telecom, announced in November 2015 that it would take over and merge with the cable TV operator.

Since SKB’s application on Dec. 1 for approval from different government ministries and agencies for the two-fold M&A, there seemingly has been little or no progress on the government side.

The review session was previously scheduled to be completed in April.

Bureaucracy, miscommunication, and noncooperation of government regulators involved in the approval process is being pointed out as the main culprit for the delay.

Attending a briefing session at the National Assembly on June 28, Jeong Jae-chan, the chairman of the FTC, said that “the FTC’s reviewing process is being delayed since some reports of the ICT Ministry and the Korea Communications Commission related to the issue were belatedly published in March.”

In response to the chairman’s comment, an official from the ICT Ministry was quoted by a local news outlet as saying “it is not true that the ministry had stood idly, doing nothing, we have been working on the issue.”

The reports mentioned by the FTC chairman is about the status of the nation’s telecommunications and broadcasting markets in 2015.

The ICT ministry in charge of giving the final permission to the M&A deal is also awaiting an approval from the FTC, which will decide if the deal would be anticompetitive.

Some telecom and IPTV business operators, includingKT and LG Uplus, have been opposing the merger of SKT’s subsidiary and CJHV as it would cement SKT’s grip on both the telecom and broadcasting sectors.

By Kim Young-won (wone0102@heraldcorp.com)