The Federal Trade Commission gave Cable & Wireless' $340 million acquisition of Digital Island its stamp of approval Thursday. Executives at the British telecommunications firm said the FTC announced the early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvement Act, pushing the deal one step closer to completion.
The merger, expected to close this quarter, will combine Digital Island's infrastructure and content distribution services with those of Cable & Wireless, bringing cost benefits and revenue growth, the companies said. Though the acquisition will dent the earnings of Cable & Wireless in the near term, it is expected to add to earnings by the end of the third year, the companies said. Once completed, Digital Island will become a wholly owned subsidiary of Cable & Wireless. Digital Island will remain based in San Francisco with its current management team.