LG Uplus will reportedly soon decide to buy CJ Hello, the number one cable TV company in Korea. According to telecommunication industry sources on Feb. 8, LG Uplus is planning to hold a board of directors’ meeting as early as next week to officially purchase CJ Hello.
Earlier, LG Uplus Vice Chairman Ha Hyun-hoe told reporters on Dec. 19 last year, "We are considering an M&A to lead the change in the paid broadcasting market without limiting to a specific company. We will decide whether to sign up for the first half of this year at the latest."
LG Uplus will reportedly purchase a 53.92 percent stake of CJ Hello, which is owned by CJ ENM for about 1 trillion won.
As of the first half of last year, LG Uplus' market share in the paid broadcasting service market was 11.41 percent, ranking fourth. If it takes over CJ Hello (13.02 percent), it will quickly surpass SK Broadband (13.97 percent) and jump to second place in the market.
Although CJ Hello has been pushing for its own survival since the merger and acquisition with SK Telecom (SKBroadband) was canceled in 2016, it has been seeking to sell it again due to deteriorating competition in the paid broadcasting market.
At that time, CJ Hello Vision and SK Telecom's merger and acquisition were cancelled when the Fair Trade Commission (FTC) made an unprecedented decision to reject the deal. This was due to concerns that normal competition will be limited if both companies merge and that monopolistic and oligopoly of mobile telecommunication markets will be huge.
Unlike SK Telecom, LG Uplus is relatively free from the controversy over the transfer of control in the broadcasting and communication market, which has been a problem, as it is not the No. 1 operator in the telecommunication market. In the Fair Trade Commission's review of business combinations, experts say that restricting competition is unlikely to be a problem.
Meanwhile, LG Uplus said, "We have not decided on whether to take over CJ Hello or hold a board of directors’ meeting."