Mucho, Yonsu, Jman, Pat,
I was being a little sarcastic with the lotto ticket comment. What I meant was that there would be a huge reward if this deal were to go through, and if the reward is very significant, you may take additional risk.
On the DOJ review:
First, take the customers. Will the JDSU and SDLI customers be happy with this merger, on a long term basis? You are eliminating a significant competitor from the marketplace, and creating a mega technology company that has the potential to dominate the IP landscape. An Intel in fibre? Does this make the customers happy? How does the DOJ perceive this?
Second, take the competition. What happens to the potential of smaller competitors? Will the smaller companies complain to the DOJ? How does the DOJ perceive the new competitive landscape?
Third, take "innovation" (the new DOJ buzzword). Will a combined JDSU and SDLI lead to more or less innovation than a competitive JDSU and SDLI? How does the DOJ perceive this.
The DOJ, IMHO, has gone from a presumption that deals are OK, to a presumption that deals are bad. They are looking for excuses to sue to block them. Any one of the above would qualify as an excuse.
I think I heard on CNBC that this is the largest technology merger, ever. A landmark case. You have Klein and Reno on a roll, setting standards for regulation that we haven't seen in years.
And in the WCOM/FON deal, all "in the know" reports said that WCOM/FON were willing to divest all long distance and FON internet backbone, essentially making the deal just wireless. This would have increased competition, not limited it.
Don't get me wrong, I think it's a great deal from a shareholder perspective, and I believe consolidation in the industry is good for almost everyone, especially good for the consumer. I would love to see it go through. With this DOJ, I don't think it has much of a chance.
Hope I'm wrong,
John |
