California consumer advocacy groups have expressed opposition to a proposed merger CenturyLink Inc. and Level 3 Communications Inc., a deal for which CenturyLink has offered $34 billion. Recent reports have said that the transaction is expected to be completed by the end of September.
Some have said that the proposal is likely not to be a serious concern for regulators, since most consumers are not likely to be affected, but opponents have requested that the California Public Utilities Commission withhold approval for the merger until certain fears are laid to rest. Among these are concerns about competition, consumer protections, service quality and reliability, as well as potential job loss from the deal.
Mergers and acquisitions are regulated at both the state and the federal level. In California, the Public Utilities Commission is responsible for approving mergers and acquisitions involving companies with a gross annual revenue over $500 million. The commission is responsible for ensuring that a proposed transaction is beneficial to the consumers, does not adversely affect competition, and is generally in the public interest. At the federal level, the Federal Trade Commission is responsible for reviewing proposal for proposed mergers and acquisitions meeting certain requirements.
Business mergers and acquisitions can present more than regulatory concerns, of course. In any case, there is a lot of analysis and planning that has to take place in order for the transaction to have the best chance of success.
Mergers and acquisitions certain impact companies different, depending on their financial standing with respect to one another. Companies need to work with experienced legal counsel to address these issues. In a future post, we’ll say more about this issue.
Source: California Public Utilities Code, Section 854