DOJ Hurdle Cleared – All Eyes On FCC
With the announcement today that the Department of Justice has approved the merger, all attention now shifts to the FCC. While getting the antitrust issue out of the way was a large accomplishment, the merger can not be consummated until the Federal Communications Commission gives their blessing on the deal.
It is with the FCC that merger hopefuls now set their sights. The FCC can and likely will attach various stipulations for the merged company to agree to. Activity at the FCC has been busy, and Commissioner Martin has indicated that he has asked the staff to draft documents with several situations for consideration.
The DOJ news sent Sirius and XM upwards, but with this good news also comes the reality that there is still one regulator that needs to render a decision.
The decision by the DOJ is very interesting in that it spells out pretty specific reasoning behind their decision. Some “experts” had felt that a positive DOJ decision was very unlikely. I have always maintained that I felt the market would get a broader definition, partly because of the obvious crossover in platforms that has been happening at a rapid pace over the last few years. I also felt strongly that the DOJ would give a lot of weight to what the competitive landscape would look like in the future. Some were critical of that opinion, but in the end, the DOJ was very specific that technological change weighed into their decision.
At this point, a major step in the merger has been taken. There is one more step to happen. All Eyes Are Now On The FCC.
Position – Long Sirius, Long XM
I have thousands of shares of Sirius. What will happen to the ticker symbol and final cost when the merger is complete?
I think it is just tooooo much of a coincidence that the DOJ decision was made public the trading day after almost 400,000 SIRI call options axpired worthless.
Lynn, Could you explain.
I agree Lynn.
Tyler, I would have to say though, that what the DOJ said kind of ties the hands of the FCC, for putting too many conditions in. The reason being the DOJ basically said there were no resrictions needed to keep prices low and the fact that they really did not compete with each other.
Which brings up the arguement with FrontMED about each satilite company going after the others existing subribers. I would like to say, he once again was proven wrong.
The competitive landscape is now defined. The DOJ defined the market in the way that I felt they would, and this bodes well for the prospects of the merger.
I like the way the DOJ outlined their reasoning, and this should put the endless debate to rest.
Too bad it took them sooo long..
Tyler, I have a feeling FrontMed (Hippocritical ass) will come up with some other bogas arguement. You would think though after being proven wrong so many times he would be more reasonable.