Merging entities set to relieve EC concerns
America Online and Time Warner say they look forward to upcoming European Commission hearings to allay any anxieties over their proposed merger.
Spokesmen for both congloms issued bullish statements Thursday on the prospects that their proposed megamerger would pass regulatory muster in Europe. The press had reported that confidential EC documents related to early AOL/TW review findings were critical in tone.
Reports also suggested that EC staff members have documented concern over Time Warner’s pending acquisition of global music group EMI.
The European Union’s “actions are a normal and predictable part of the review process in Europe, where the EU staff identifies issues for further consideration,” a Time Warner spokesman said. “The companies are looking forward to meeting with the EU soon, and we are confident that we will provide them with assurances with respect to the issues they raised. These transactions will deliver tremendous benefits to consumers and enhance competition in the U.S. and abroad.”
The companies expect to finalize the deals along the same timeline as previously anticipated, with AOL/TW targeted to close this fall and TW/EMI by year’s end, the spokesman said.
“We’re confident that we will satisfy the commission that the AOL/Time Warner merger poses no competitive problems in Europe,” AOL spokeswoman Tricia Primrose said.
An EMI spokeswoman acknowledged receiving a “statement of objections” from the EC but declined to specify any concerns identified by the commission.
“We are continuing a dialogue with the commission and moving forward in the process to focus on any issues that may need to be addressed,” the spokeswoman said. “We remain convinced that the arguments for the cases we have put forward are strong, and we hope to close before the end of the year.”
Press accounts suggested that EC staff objections on TW/AOL stemmed primarily from potential dominance of Internet services. The EMI acquisition reportedly has raised concerns about music-industry antitrust issues.
The confidential EC documents represent “a very early shot across the bow” of the proposed transactions, said William Whyman, president of Washington, D.C.-based investment research firm Precursor Group.
“They are sending a marker that they want to be part of the discussions and may ask for concession,”Whyman said.Closed EC hearings are set to commence on both proposed transactions within the next two weeks.
In the U.S., the FCC and the Federal Trade Commission are conducting regulatory reviews. Both U.S. and European reviews are expected to conclude by October.
(Bloomberg News contributed to this report.)