The US Justice department might reject Comcast’s planned US$45bn tie-up with rival Time Warner Cable (TWC), according to multiple reports.
The Wall Street Journal yesterday reported that the parties will meet Justice department officials on Wednesday…
The US Justice department might reject Comcast’s planned US$45bn tie-up with rival Time Warner Cable (TWC), according to multiple reports.
The Wall Street Journal yesterday reported that the parties will meet Justice department officials on Wednesday to discuss potential remedies to gain approval for the deal, first announced in February 2014.
The report also suggested that the FCC, which is also reviewing the merger, is considering designating the takeover for a hearing, with the aim of blocking it.
On Friday Bloomberg reported that the department’s antitrust lawyers are nearing a recommendation to block the deal amid concerns that it could harm consumers.
Comcast, TWC, the FCC and the Justice Department were not immediately available for comment.
Analysts at New Street Research believe that rather than being an inevitable step towards a court challenge, the move is meant to start “a negotiation over conditions and to provide leverage to the government in that negotiation.”
As part of the proposed remedies for the merger, Charter Communications, beaten to the TWC acquisition by Comcast, agreed to buy 3.9 million subscribers set to be divested by Comcast and TWC.
This deal would also collapse, should the Comcast-TWC tie-up fail.
Furthermore, according to the Bloomberg, TWC could potentially block Charter’s recent acquisition of Bright House Networks, as part of a long-term arrangement to negotiate programming and other deals for the smaller rival, and itself acquire Bright House.
Charter’s majority shareholder John Malone reportedly said he would try again to buy TWC if the deal with Comcast failed.
