In every industry, certain legal prerequisites must be met before the purchase of a business can be considered final. Some companies who are buying a business have to wait for the federal government to approve the purchase before it can move forward in order to comply with federal antitrust laws. People in Maryland who follow the telecommunications business most likely heard about the proposed merger between Comcast and Time Warner Cable. The deal was recently called off because it did not receive federal approval.
Regulators nixed the $45 million merger because of concerns that Comcast could wield too much power in the industry due to its sheer size. If the two companies combined, over 50 percent of all high-speed Internet users in the country would be looking to one company for service. That was simply too much control for federal overseers.
This is also the first time that a merger proposed by Comcast has been rejected. The company's humble Mississippi beginnings are a long way from the telecommunications giant of today. Merger after merger helped the company to grow to its current size and market share, but it appears that the same federal agencies who previously approved its mergers believe the company has grown beyond a rubber stamp approval.
A Maryland company buying a business will want to make sure that there are no legal requirements that could derail the transaction. If there are any obstacles, an analysis must be undertaken to determine whether it is worth the risk. Whether there is any real risk that the transaction will not occur, making sure that all of the legal requirements are met is crucial before moving forward, as is illustrated by the latest Comcast merger attempt.
Source: The Washington Post, "Comcast to drop mega-merger with Time Warner Cable", Brian Fung and Cecilia Kang, April 24, 2015