Hyundai HCN Enters 'Cautious Mode' Ahead of Cooperative Selection... Postponed to Next Week

Selection of Preferred Negotiation Partner Scheduled for Announcement on 22-23 Postponed to Next Week

[Asia Economy Reporter Koo Chae-eun] Tensions are rising in the telecommunications industry as the announcement of the preferred bidder for the acquisition of Hyundai HCN has suddenly been postponed to next week. Hyundai HCN was scheduled to announce the preferred bidder today (23rd) or on the 24th, but the announcement was delayed to next week due to last-minute reviews.

On the 23rd, a Hyundai HCN official stated that the announcement of the preferred bidder would be postponed by a week and is planned to be made sometime next week. Once the preferred bidder is selected, they are granted exclusive negotiation rights for a certain period, followed by due diligence and final sale negotiations, effectively transferring control to the acquirer. This is seen as a last-minute "breather" before the final decision.

Initially, the industry predicted KT Skylife as the most likely sole preferred bidder. This is because KT Skylife reportedly offered an acquisition price in the 500 billion KRW range, significantly higher than the 400 billion KRW range proposed by SK Telecom. Hyundai HCN had 1,328,455 subscribers as of last year, and the acquisition price appears to have been set at around 390,000 to 400,000 KRW per subscriber. Notably, KT Skylife was the most proactive among the three telecom companies participating in this acquisition battle.

However, KT Skylife faces several hurdles before acquiring Hyundai HCN, including government reviews and demands for public interest from the National Assembly. As KT's dominance in the paid broadcasting market strengthens, regulatory and M&A reviews are expected to become more stringent. If KT Skylife is selected as the preferred bidder, an "absolute powerhouse" with a 35.47% market share in the paid broadcasting market will emerge. The gap in market share with the second-place LG Uplus and HelloVision (24.91%) and third-place SK Telecom and T-Broad (24.17%) will widen to as much as 10 percentage points.

The Ministry of Science and ICT and others emphasize a "speedy" review principle for telecom and broadcasting M&A, but the government approval process requires extensive stakeholder consultations. The National Assembly is also a potential obstacle. On the 8th, KT Skylife held a meeting with the Ministry of Science and ICT regarding measures to strengthen public interest, following a request for materials from Representative Byun Jae-il (Democratic Party, Cheongju Cheongwon-gu) of the National Assembly’s Science, Technology, Broadcasting and Communications Committee. The "strengthening of the public duties of satellites" demanded by the 20th National Assembly could also pose a burden during and immediately after the M&A review process.

Professor Choi Sung-jin of Seoul National University of Science and Technology said, "If the three telecom companies compete with similar market shares through the acquisition of HCN, it could lead to competitive service development that benefits consumer welfare." He added, "If there are concerns about KT group’s market share concentration after KT Skylife’s acquisition, measures such as preventing cable subscribers from switching to wired subscribers for three to five years could be considered as a regulatory safeguard in the future."

This content was produced with the assistance of AI translation services.