Posted by : Matthew Wild | On : March 26, 2008

March 24, 2008. The Antitrust Division cleared the merger between XM Satellite Holdings and Sirius Satellite Radio — the only satellite radio providers. In its closing statement, the Antitrust Division concluded that it would be unlikely that the parties could raise prices post-merger. The Antitrust Division noted that the parties do not compete for current customers because the costs of equipment makes switching to the other provider impractical. The Antitrust Division concluded that relevant market for new customers would have to include alternative sources for audio entertainment in addition to satellite radio. The Antitrust Division further noted that future technology would only increase the competition faced by the parties. With respect to competition for sole source contracts with major auto manufacturers, those contracts are locked-in and there is unlikely to be any competition for those contracts for many years. Finally, the Antitrust Division noted that the transaction would result in substantial efficiencies (and cost savings) which further supported its conclusion that the transaction would not harm competition.



Posted by : Matthew Wild | On : February 28, 2008

February 13, 2008.  On November 16, 2006, Bain Capital and Thomas H. Lee Partners (“THL”) entered into an agreement to purchase a 70% interest in Clear Channel Communications for $28 billion.  By the time that the transaction was scheduled to close, Bain and THL also would have passive equity interests in two competing radio operators – Cumulus Media Partners (“CMP”) and Univision Communications.  Notwithstanding that the equity interests would be passive and with respect to Univision would be only 14%, the Antitrust Division alleged that the overlap between these competitors would result in higher prices for radio advertising and Spanish-language radio advertising in the geographic markets in which they compete.  Accordingly, the Antitrust Division conditioned approval of the transaction on divestiture of the competing assets.  Attached is a more in depth discussion of the transaction and Antitrust Division’s competitive concerns.  Discussion(Bain&THL/Clear Channel)  The DOJ Press Release and Competitive Impact Statement also are attached.  DOJ Press Release (Clear Channel)Competitive Impact Statement (Clear Channel)