Lessons from the failed Comcast-Time Warner merger
The most talked-about merger of the last year is officially dead in the water, according to representatives from Comcast and Time Warner Cable. The deal, which would have created the largest cable service in the United States, was under heavy scrutiny from regulators and the general public alike. Here are three lessons to learn from the failure of this merger:
Public opinion matters. Comcast has been identified as the least popular company in America by a number of surveys. Because cable users have felt dissatisfied with the service and pricing structure of Comcast's services, convincing the country that this deal would improve user experiences was a tough sell.
Keep the marketplace competitive. One of the biggest critiques of the merger was that it would eradicate competition in the cable market. Competition is a key to innovation, so mergers shouldn't remove all the oxygen from their respective market segments.
Anticipate regulatory hurdles. On the subject of competition, regulators pursued the merger intensely and claimed it would create a monopoly. The legal and ethical ramifications of a merger should always come under consideration.
"There had been indications in the last few days that the deal would find it difficult to get the required regulatory approvals, with staff attorneys at the U.S. Justice Department's antitrust division stating that they were nearing a recommendation to block the deal, and the FCC staff recommending a procedural move that would put the merger in jeopardy," explains Forbes in the wake of the cancelation.
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