Far EasTone Telecommunications Co (遠傳電信) yesterday said it is to merge with Asia Pacific Telecom Co (亞太電信) in a share swap worth about NT$24.7 billion (US$881.48 million), which would be the latest consolidation in Taiwan’s telecom industry.
Based on the statement, each share of Asia Pacific Telecom would be swapped for 0.093 Far EasTone shares.
The deal is expected to be completed on Sept. 30.
Photo: Lisa Wang, Taipei Times
The announcement follows a plan by Taiwan Mobile Co (台灣大哥大) to acquire smaller peer Taiwan Star Telecom Corp (台灣之星) for NT$28.2 billion.
Originally, Far EasTone had planned to increase its stake in Asia Pacific to 23.8 percent this year based on an agreement the two firms signed two years ago.
Far EasTone has an 11.58 percent stake in Asia Pacific.
“However, after our peers announced their merger plan in December last year, we thought our strategy should evolve with the changes in the market and the industry landscape,” Far EasTone president Chee Ching (井琪) told a news conference in Taipei.
Far EasTone expects to see synergy during the first year after the merger, as it would expand its 5G bandwidth and customer base.
Far EasTone would become the nation’s No. 2 telecom operator after the merger, with 9.2 million subscribers, surpassing Taiwan Mobile and Taiwan Star’s combined 9.12 million.
Far EasTone expects the health of the nation’s telecom industry to improve with the deals, as pricing competition would diminish with the reduction of operators to three from five, Ching said.
Hopefully with fewer players, bandwidth auctions would be less competitive, leading to reasonable bidding, she said.
Hon Hai Precision Industry Co (鴻海精密), which has a 36 percent stake in Asia Pacific, would hold 4 percent of Far EasTone after the transaction is completed.
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