ASIASAT, the satellite company that beams STAR TV's signal, is set to merge with its mainland rivals APT Satellite in a union likely to dominate the region's TV industry.
Sources said last week that talks between the two companies had reached a critical stage after two months of confidential discussions.
If a deal can be reached the two companies could be in a position to dominate the burgeoning Asian satellite TV signals distribution market over the next few years, with both companies set to launch powerful satellites over the next 18 months.
It would also go much of the way towards resolving the ill-feeling that has soured the relationship between AsiaSat and one of its three joint owners, Hutchison Whampoa.
Until two-thirds of STAR TV was sold to Rupert Murdoch's News Corporation it was jointly owned by Hutchison Whampoa and a family company run by chairman Li Ka-shing.
In May STAR TV signed a deal with the China-led APT to lease 20 transponders, or signal distributor/receivers on the APStar 2 satellite, due for launch in early 1995.