The actual technical and legal details of organizing a successful business merger are rather complex. From satisfying the concerns of investors and regulators, to ensuring that proper due diligence has been exercised leading up to the transaction, major mergers and acquisitions need to be handled with care. In fact, when acquiring a new business even a friendly acquisition can prove to be a rather surprisingly challenging task.
Colorado readers are likely familiar with the proposed takeover of Time Warner Cable by Comcast. It was recently reported that Comcast offered more than $45 billion to buy the company. The proposed merger has meet with considerable criticism from consumer advocates and will likely face incredibly close scrutiny from antitrust regulators. The deal could potentially reshape the nations pay television and broadband markets.
According to Comcast, consumers would benefit from increased broadband speeds and more sophisticated set-top boxes due to the acquisition. Comcast believes that the plan will be approved by regulators.
Comcast and Time Warner are currently the two top U.S. cable providers. If the companies do merge the resulting business would span from across the nation with a significant hold of the broadband Internet market and an almost 30 percent share of the cable TV market. The deal would also put Comcast in 19 of the 20 biggest television markets in the country. The potential deal is reportedly an all-stock deal.
Surviving regulatory scrutiny in a major merger or acquisition is an art as much as a science. Whenever a merger raises possible antitrust implications it is important that counsel begin to address these concerns immediately. In addition to pre-notifying the federal government of some mergers, counsel should also be familiar with Department of Justice and Federal Trade Commission Merger Guidelines, as these are the best indicators of potential antitrust issues.
Source: Reuters, "Comcast takeover of Time Warner Cable to reshape U.S. pay TV," Liana B. Baker, Feb. 13, 2014