Mega-mergers 'still on course'

Officials reviewing the proposed deal between America Online (AOL) and Time Warner could reach a decision as early as this week, resolving the companies' year-long pursuit of the largest merger in US corporate history.

The Federal Trade Commission (FTC) has scheduled a closed hearing for Thursday, in which it is expected to discuss or vote on the $162bn deal. The FTC also could postpone a decision, as it has done several times.

Meanwhile, drugs giant Glaxo Wellcome is insisting that its merger with SmithKline Beecham is on course to be completed by the end of the year.

But a spokesman admitted the year-end deadline was "under pressure."

High Court date

The two drug companies are awaiting FTC approval. The deal then has to be ratified by the High Court in London.

But a Glaxo Wellcome spokesman told BBC News Online that shares in the new combined company would be trading on the New York and London stock exchanges by the end of the year - even though a High Court date has yet to be set.

"We will inform shareholders in advance of the High Court date, but it will happen before the end of December," he said.

The two firms were due to have completed the merger, which will create the world's largest drug company, by 25 September.

But it was delayed by the FTC, which raised concerns about the impact of the merger on competition in the market for anti-smoking products.

SmithKline Beecham owns leading over-the-counter brands Nicorette and NicoDerm, while Glaxo produces Zyban, the only approved prescription drug for helping smokers quit.

AOL/Time Warner delays

The AOL/Time Warner merger has also been delayed several times, as regulators scrutinise the massive combination for possible anti-competitive effects.

The two companies, seeking to meld AOL's vast internet presence with Time Warner's media empire, won approval from European regulators in October.

In November, the two companies extended negotiations with the FTC to mid-December, giving anti-trust regulators time to review additional developments in the deal.

The fundamental issue is how to prevent them from leveraging their power over transmission and enormously popular content

Consumer's rights campaigner Gene Kimmelman

According to a report in Monday's Washington Post, three - and possibly four - members of the five-member FTC were ready to approve the deal.

The two also need clearance from the Federal Communications Commission, which has said it will wait until the FTC's anti-trust process is complete before acting.

High speed access

The deal brings together a media conglomerate that owns a far-reaching network of cable systems and shows, and the nation's top internet service provider, with 25 million subscribers.

To satisfy wary regulators, the companies promised they would give AOL's rivals access to Time Warner's high-speed cable lines to deliver internet service.

Under pressure, Time Warner backed up the pledge with an agreement to offer AOL's chief competitor, EarthLink, over its cable systems.

That means consumers who subscribe to Time Warner's high-speed internet cable service will have choices besides AOL for their online provider.

Some internet providers still argue that the terms reached by EarthLink may not set a suitable blueprint for negotiations in the rest of the industry.

Critics and rivals also have raised concerns about the ability of the combined business to hoard Time Warner's content - which includes cable channels HBO and CNN, and movies and music from Warner Brothers - and seal it off from other distributors.

"The fundamental issue is how to prevent them from leveraging their power over transmission and enormously popular content," said Gene Kimmelman of Consumers Union.

EC conditions

European Commission consent came with a number of conditions attached, one of which was that AOL Time Warner must cut all its links with music and publishing giant Bertelsmann of Germany.

But the biggest concession was the cancellation of the planned merger of Warner Music and UK-based music group EMI.

That deal would have created one of the world's largest music groups and sharply reduced competition in the European market.