CJHV, SKB submit reports to convince FTC of M&A

By Kim Young-won
  • Published : Jul 11, 2016 - 18:00
  • Updated : Jul 12, 2016 - 09:49
[THE INVESTOR] Cable TV network operator CJ HelloVision and IPTV firm SK Broadband submitted follow-up reports to the antitrust watchdog after its recent rejection of their merger and acquisition deal.

The two companies refused to provide any details of the report, but they are said to have claimed the feasibility of the planned M&A deal.

The Fair Trade Commission had opposed the proposed M&A plan on the grounds that the combined business entity will become a dominant player in the pay TV market as it would rule 21 broadcasting service areas out of 78 across the nation -- the highest figure in the sector.

SK Telecom’s head office in Seoul. The Investor

CJHV has argued, however, that method of calculating market share, based on the number of broadcasting services areas that a company reigns supreme in, is outdated and does not reflect the rapidly changing market conditions.

“The Korea Communication Commission’s method for market share calculation is outdated and not apt for the current media business sector where global media firms, such as Netflix, YouTube, and Apple TV, vie for leadership,” CJHV said in a statement.

In terms of the number of subscribers, CJHV with a 14.8 percent market share is the second largest player in the pay TV market after KT, which runs IPTV service olleh and satellite TV firm KT Skylife, while SKB comes third with 10.97 percent.

Even if the M&A is achieved, the merged firm will remain as the second largest pay TV market by holding 25.77 percent of market share, compared to KT’s 29.4 percent market share, CJHV argued.

SKB, a wholly owned subsidiary of network operator SK Telecom, announced in November, 2015 that it would take over and merge with CJHV, an affiliate of home shopping company CJ O Shopping.

The antitrust watchdog said it objected to the planned M&A in its preliminary decision, as it would harm fair market competition. The FTC is slated to hold a meeting soon to decide on approving the M&A.

By Kim Young-won (