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PrimeStar abandons bid
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October 14, 1998: 7:57 p.m. ET
In the face of DOJ resistance, satellite company drops plan to acquire ASkyB
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NEW YORK (CNNfn) - PrimeStar Inc. will not be buying American Sky Broadcast Co. after all, the U.S. Department of Justice said Wednesday.
PrimeStar's bid to purchase the direct broadcast satellite television operator for $1.1 billion stalled May 12 when the DOJ filed an antitrust suit alleging that "the proposed acquisition would have allowed five of the largest cable companies in the United States, which control PrimeStar, to protect their monopolies and keep out new competitors."
PrimeStar is a joint venture of TCI (TCOMA), MediaOne Group (formerly known as US West Media Group) (UMG), Cox Communications Inc. (COX), Comcast Corp. (CMCSK) and Time Warner Inc. (TWX) -- the parent of CNNfn -- each of which operate cable television businesses.
General Electric Co. (GE) is a minor shareholder.
American Sky Broadcast, a joint partnership venture between News Corp. (NWS) and MCI WorldCom Inc. (WCOM), is one of the leading companies in the undeveloped direct broadcast satellite industry, which uses orbital satellites to transmit video programming direct to subscriber homes.
"This is the right result and a big win for consumers," said DOJ antitrust chief Joel Klein. "DBS service is the first real competitor to local cable monopolies. As a result of this action, the last remaining DBS slot will not fall into the hands of the dominant cable companies."
News Corp. and PrimeStar recently had been engaged in negotiations with the DOJ, offering to divest the cable companies' interest in PrimeStar to a separate entity, United Video Satellite Group Inc., a unit of TCI. 
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Primestar
News Corp.
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