Federal antitrust regulators are reportedly seeking
additional information from America Online
Inc. and Netscape Communications
Corp. about their pending merger.
According to published reports, the U.S. Justice Department has requested
information under the Hart-Scott-Rodino antitrust act, although neither the
government nor the companies would elaborate. That act requires all mergers
to be submitted to the Justice Department’s antitrust division and the Federal Trade Commission for review.
A merger can only proceed if no additional information is demanded by the
government agencies within 30 days of the merger. If the government seeks
additional information, regulators are giving 20 days after asking for it
to try and block a deal.
The request is not an attempt to block the merger, but it does suggest the
government will be giving it increased scrutiny.
The two companies agreed to a $4.2 billion marriage in November. However,
the deal is now valued at $6.5 billion due to the increase in AOL’s current
trading price.
Justice’s request comes as it is involved in a widescale antitrust
investigation against Microsoft
Corp. Microsoft’s chiefs say AOL’s acquisitions of Netscape, CompuServe
and Mirabilis prove competition is working and that the antitrust trial is
unnecessary.
Shortly after the AOL-Netscape deal was announced, U.S. District Judge
Thomas Penfield Jackson, who’s handling the antitrust trial, said the deal
might cause “a very significant change in the playing field as far as this
industry is concerned.”
