Microsoft/Skype announcement added in first graph.NEW YORK ( TheStreet) -- Confirming reports earlier this week, the European Commission today announced it has approved Microsoft's ( MSFT) $8.5 billion purchase of Skype. The European Commission downplayed concerns that users of competitor services to Skype and Microsoft's consumer online video communications products would be harmed by a merger, citing the competitiveness of the overall market. In a statement announcing the approval, the European Commission said, "In the area of consumer communications, the investigation found that the parties' activities mainly overlap for video communications, where Microsoft is active through its Windows Live Messenger. However, the Commission considers that there are no competition concerns in this growing market where numerous players, including Google ( GOOG), are present." In June, the U.S. Federal Trade Commission also approved Microsoft's purchase of Skype because it saw other voice and video over internet competition to Skype from Google Talk and Apple ( AAPL) FaceTime. Prior to the approval, Messagenet, an Italian internet video and voice communications competitor to Skype argued that in the merger Microsoft should unbundle Skype with Windows Live Messenger and disclose its code, which would allow rival internet communications companies to connect their users with Skype users. There was no indication any such recommendation was made by the Commission. Skype, the internet video and voice company founded in 2003 by Niklas Zennström and Janus Friis was acquired by eBay ( EBAY) in 2005 for $2.6 billion. The company was then sold to a consortium of private equity investors led by Silver Lake in 2009 for roughly $1.9 billion. Ebay, which kept a small Skype stake and its private equity buyers profited significantly from Microsoft's acquisition. In its 2009 purchase, Silver Lake brought Zennström and Friis back to the company they founded, ending a dispute with Ebay. As part of the approval, the European Commission said it assessed, "the possibility for Microsoft (i) to degrade Skype's interoperability with competing services and/or (ii) to tie its own products, in particular its leading Windows operating system, with Skype, thereby limiting other players' ability to compete." It found no such threat because, "Microsoft would not have an incentive to degrade Skype's current interoperability as it is essential for Microsoft that Skype's services are available on as many platforms as possible in order to maintain and enhance the Skype brand." In its press release announcing the deal, the European Commission said that the "vast majority" of mergers aren't a threat to competition, and that it usually decides within 25 business days whether a deal will be approved or taken through in in-depth investigation. Sony ( SNY) is in talks to buy its mobile phones joint venture with Ericsson ( ERIC), according to Reuters. An anonymous source told the news service that Sony is in talks to buy out its 50% wireless handset joint venture entered in 2001, which created the world's sixth biggest mobile phone maker. The buyout is seen to allow Sony to integrate its smartphone capabilities with its tablet, P.C. and handheld video games businesses. It's also seen as a way to stay in competitive stride with Apple and Samsung in new smartphone and tablet sales.
On Thursday, the Wall Street Journal first reported that talks had begun about a potential JV buyout. The Financial Times yesterday reported that Yahoo! ( YHOO) may be looking to sell its 35% stake in Yahoo Japan. Earlier this week, Yahoo! confirmed its hired Goldman Sachs ( GS) and Allen & Company to be advisers on strategic options, which have spawned rumors ranging from a Microsoft ( MSFT) takeover to a buyout from Alibaba, another Yahoo! venture or private equity firms Silver Lake and Hellman & Friedman. Yahoo Japan is the U.S. online search and news giants second largest asset after its 40% holding in Chinese ecommerce company Alibaba. Currently Yahoo Japan is valued at $19 billion, making a 35% stake worth nearly $6.65 billion. Recently Yahoo's 43% stake in Alibaba has been valued at over $12 billion by new investors. Currently, Yahoo has a total market cap of nearly $20 billion, almost equal to the two minority-owned assets rumored for sale. The key to Yahoo's sale of a JV stake will be the tax implications of a deal. Earlier in the year, it had issues trying to sell its piece of Yahoo Japan but ran into complications with the IRS, according to Financial Times sources. Yahoo, the largest U.S. website by viewers is reeling after its board voted to fire former Chief Executive Carol Bartz earlier this September and replace her with CFO Timothy Morse on an interim basis.
Yesterday, Barclays Capital ( BCS) and Del Monte Foods settled a shareholder dispute arising from a leveraged buyout sale of the 95-year old foods seller's pet foods division in 2010, putting an end to findings by the Delaware Chancery Courts that the two parties acted improperly in the pet foods sale to a consortium of private equity investors led by KKR ( KKR).