EchoStar Communications $16.2bn bid to acquire rival satellite television outfit DirecTV was dealt a potentially fatal blow yesterday when the US communications regulator moved to block the deal.
The Federal Communications Commission unanimously voted to refer the deal to an administrative law judge for review - a process that could take months and that could mark the end of the merger plan.
"The combination of EchoStar and DirecTV would have us replace a vibrant competitive market with a regulated monopoly," FCC chairman Michael Powell said at a news conference.
According to a Reuters report, the FCC said the benefits claimed by the companies were not borne out and instead competition would be harmed, prices would rise and future innovation would be hampered. Combining the US's two biggest pay satellite TV operators would have given the new company about 18.2m subscribers.
The companies now have 30 days to amend their application and have said that they will continue to work on winning approval from the FFC.
News Corp, which spent years in negotiations with DirectTV owner Hughes Electronics before losing a bidding war to EchoStar, has said - according to Reuters - that it would carefully consider resuming its effort to acquire DirecTV if the EchoStar deal falters.