[Courtesy of SKT]
South Korea's anti-trust watchdog has completed the initial screening of top mobile carrier SK Telecom's bid to become a media giant through the acquisition of a major cable channel operator, industry sources said Monday.
In an effort to bolster next-generation businesses for sustainable growth in the saturated and competitive domestic market, SK Telecom has offered to buy CJ Hellovision (CJH), a unit of retail giant CJ Group, with a plan to merge it with SK Broadband.
The one trillion won (0.87 billion US dollars) deal was sent to the Fair Trade Commission (FTC) for screening on December 1 last year.
SK Telecom, the flagship of South Korea's third largest conglomerate, SK Group, called for quick approval but the watchdog has been cautious due to complaints from competitors the merger would be anti-competitive.
OffIcials related to the industry said Monday that the outcome of FTC evaluation was sent to SK Telecom but it's not known when the watchdog would make its final ruling. Related government agencies are also waiting for the watchdog's decision.
The merger, if approved, is seen as a game changer in South Korea's media industry as it will help SK Telecom expand its business portfolio into mobile networks and entertainment content together.
Rivals KT Corp and LG Uplus have called foul over the deal, insisting it would allow SK Telecom to increase its dominant position in the mobile network industry. LG Uplus has argued the merger would cost more for consumers when they watch SK's pay-TV programs.
US proxy voting advisory firm Institutional Shareholder Services has sided with KT and LG, expressing concern about a possible "dilution risk", while some critics have said that competition in the pay-TV and mobile network markets may pose a risk to the performance of the merged entity.
SK Telecom has insisted it could compete better with global content players such as Netflix, the US-based web-streaming giant which started its full service in South Korea in January.
International credit rating agency Fitch has said that the proposed takeover is generally good for SK Telecom because it can strengthen its media competitiveness, bundling ability and operating efficiency.
Aju News Lim Chang-won = cwlim34@ajunews.com
reporter
Park Sae-jin
swatchsjp@ajunews.com
