SK Telecom andCJ HelloVision appear to be taking separate paths already to minimize damage in case they are not able to overcome the antitrust agency’s opposition to their merger.

CJ HelloVision, a leading cable TV service provider, has hired local law firm Yoon & Yang LLC as its new legal representative, according to sources Tuesday. 


The CJ subsidiary and SK Telecom have shared two other local law firms, Lee & Ko and Shin & Kim, as legal advisers so far. CJ leaving the two joint legal firms and appointing a new one is seen as a precautionary step in fear of possible deal failure, they added.

A CJ HelloVision official said that the company has named a new legal partner in order to have a separate voice from SK Telecom, stressing that the two are now in different positions.

“After reviewing the report by the Fair Trade Commission, we concluded that we need to make separate opinion apart from SK Telecom,” the official said.

“FTC was assessing (elements) that create market restraint by focusing on the No. 1 cable TV service provider CJ HelloVision, not No. 1 mobile carrier SK Telecom, so we need to clarify why from the merger has to happen by providing the perspective of the cable TV service provider.”

SK Telecom, meanwhile, played down speculations that each firm is obliged to give a separate statement before the FTC. CJ HelloVision having a separate legal partner doesn’t necessarily mean that it has already taken a different path but may be an attempt convince the regulator on the matter.

Despite the explanation, CJ HelloVision switching its legal partner just before the FTC’s final ruling on their M&A attempt is seen as unusual.

Last Tuesday, the FTC notified SK Telecom that it will not permit the merger plan, saying the deal impedes fair market competition. The FTC also told SK Telecom it should neither carry out a merger, nor any stock trade.

Market insiders suggested that the two firms already have differences in their positions and also that CJ HelloVision fears the ramifications of the deal failure.

If the deal collapses, CJ HelloVision will face a serious setback as it has reportedly handed over a considerable amount of confidential files to SK Telecom in regard to sales strategy after it signed an M&A deal late last year. For SK Telecom, abandoning its bid to acquire CJ HelloVision is more favorable decision, as the company has no legal responsibility for ending the deal in failure.

SK Telecom’s attempt to take over CJ HelloVision -- a 1 trillion won deal -- was widely expected to give a major boost to the nation’s leading mobile carrier in expanding its media platform business.

Since November last year, SK Telecom has pushed to acquire CJ HelloVision, a cable TV network owned by food and entertainment giant CJ Group. It planned to have its subsidiary SK Broadband acquire a 53.9 percent stake in CJ HelloVision from its affiliate CJ O Shopping.

The merger would have allowed SK Telecom to secure around 4.2 million subscribers from CJ HelloVision in addition to the some 3 million IPTV subscribers that it already holds through its own Internet TV service unit SK Broadband.

If the merger was allowed to happen, the firm’s gap with KT, the nation’s largest TV platform provider, would narrow. KT has around 8.1 million subscribers.

The reason for rejecting the M&A attempt was that the deal would make the company the leading service provider in 21 of the nation’s 23 broadcasting blocs, therefore allowing SK to have a monopoly.

The FTC is set to make a final ruling on July 15.

By Cho Chung-un (christory@heraldcorp.com)