KT Group’s Acquisition of Hyundai HCN and Hyundai Media
2021.08.18.
KT Skylife, Korea’s sole digital
satellite broadcasting service provider and part of KT Group’s broadcasting
business, successfully completed acquisition of Hyundai HCN, a cable TV
network. Concurrently, KT StudioGenie, a newborn contents creation and
distribution hub of KT Group, acquired Hyundai Media, a programming provider,
from the Hyundai Department Store Group. The acquisition prices are KRW 491
billion (Approximately, USD 444 million) and KRW 29 billion (approximately, USD
26 million), respectively.
The transaction raised several
potential antitrust concerns, as KT already possessed the highest market shares
in both of the markets for Pay TV services and high-speed internet services,
while HCN possessed up to a 70% market share in some of the eight relevant geographic
markets for digital pay TV services.
Thus, several competitors have directly expressed their concerns over
the transaction, and called for the KFTC’s structural remedies (e.g.,
divestiture) and behavioral remedies (e.g., prohibition of cross-selling).
Notwithstanding such background,
Yulchon successfully persuaded the KFTC and obtained its merger clearance with
a minor behavioral remedy that is similar to the behavioral remedies imposed on
previous acquisitions of MSOs by competitors with much lower market shares than
KT’s. Specifically, Yulchon heavily
emphasized and corroborated its argument that the regulatory authorities should
put proper weight and consideration to the dynamic changes in the broadcasting
and communications industry, such as the soaring growth of the OTT services and
predominantly fierce competitive landscape.
As a result, the KFTC acknowledged that the current transaction does not
pose substantial antitrust concerns and cleared the transaction.
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