The South Korean antitrust watchdog, the Fair Trade Commission (FTC), has approved proposals for the merger of the LG Group’s three local telecoms subsidiaries; LG Telecom, LG Dacom and LG Powercom. According to the Wall Street Journal the FTC said that, having examined the proposals, it was satisfied that a tie-up between the three units would be unlikely to harm competition in either the fixed line or wireless sectors. Indeed, the antritust body claimed that the merger could allow the LG units to compete more effectively with rival SK Telecom and KT Corp. The FTC said it would allow the merger without imposing any conditions on the companies, although it said it would ‘continue monitoring the market conditions and will take strict actions when any illegal activities (by the LG units) are detected.’ An official at the FTC said the final approval from the Korean Communications Commission (KCC) is expected early next week.
Under the proposals, which were given the green light by LG shareholders last month, LG Telecom will absorb both LG Powercom and LG Dacom on 1 January 2010. The merger follows a similar corporate restructuring at KT Corp, which absorbed its own wireless affiliate, KT Freetel, in June 2009.