Far EasTone Telecommunications Co (遠傳電信), the nation's third largest mobile-phone service operator, announced yesterday it would spend about NT$30 billion in a cash-and-stock swap to take over smaller rival KG Telecommunications Co (和信電訊).
The two companies signed a letter of intent yesterday. Based on the agreement, for every KG Telecom share, Far EasTone will pay NT$6.864 cash and 0.46332 of its shares.
"Through our alliance, we will be able to reach a larger economy of scale and strengthen our market position," Douglas Hsu (徐旭東), chairman of Far EasTone, said at a press conference.
The acquisition will boost Far EasTone's customer base to some 7.7 million users and make it the country's second largest mobile-phone service operator, after Taiwan Cellular Corp's (台灣大哥大) 8.6 million users, but ahead of state-run Chunghwa Telecom Co's (中華電信) 7.67 million users.
"KG Telecom is delighted to be part of a big telecom player ... this enables us to be more involved in this competitive and fast-moving industry," said Leslie Koo (辜成允), chairman of KG Telecom.
The transaction leaves KG Telecom with 800 million Far EasTone shares along with NT$11.9 billion in cash.
KG Telecom, along with its well-known i-mode service, is expected to be absorbed into Far EasTone's operations.
"Basically the new company will still operate as Far EasTone, and KG Telecom will become a part or a brand under the company," Hsu said.
Hsu said it may take at least one month for both parties to discuss future operations and management details.
According to a bank official involved in the merger deal, KG Telecom will control 23 percent of Far EasTone's shares and retain several seats on the board.
Koo will become one of Far EasTone's board members and "play a very important role in the new company," said Ronald Song (宋雲峰), an executive of ABN Amro Holdings NV, which advises KG Telecom.
The proposed merger is expected to improve Far EasTone's competitive edge for the coming high-speed mobile Internet era.
"The move will help us to successfully migrate to third-generation [3G] mobile services," Hsu said.
A telecom analyst said a larger customer base can lower an operator's average cost in setting up 3G networks and the merger is on the right track, as the local mobile-service market is nearly saturated.
"Severe competition has left second-tier players no room to expand or to profit," said Nathan Lin (林宗賢), an analyst at SinoPac Securities Corp (建華證券).
In a bid to get a foothold in the 3G market, it is necessary to have a strong customer base, he said.
The government is aiming to recruit 1,096 foreign English teachers and teaching assistants this year, the Ministry of Education said yesterday. The foreign teachers would work closely with elementary and junior-high instructors to create and teach courses, ministry official Tsai Yi-ching (蔡宜靜) said. Together, they would create an immersive language environment, helping to motivate students while enhancing the skills of local teachers, she said. The ministry has since 2021 been recruiting foreign teachers through the Taiwan Foreign English Teacher Program, which offers placement, salary, housing and other benefits to eligible foreign teachers. Two centers serving northern and southern Taiwan assist in recruiting and training
WIDE NET: Health officials said they are considering all possibilities, such as bongkrekic acid, while the city mayor said they have not ruled out the possibility of a malicious act of poisoning Two people who dined at a restaurant in Taipei’s Far Eastern Department Store Xinyi A13 last week have died, while four are in intensive care, the Taipei Department of Health said yesterday. All of the outlets of Malaysian vegetarian restaurant franchise Polam Kopitiam have been ordered to close pending an investigation after 11 people became ill due to suspected food poisoning, city officials told a news conference in Taipei. The first fatality, a 39-year-old man who ate at the restaurant on Friday last week, died of kidney failure two days later at the city’s Mackay Memorial Hospital. A 66-year-old man who dined
‘CARRIER KILLERS’: The Tuo Chiang-class corvettes’ stealth capability means they have a radar cross-section as small as the size of a fishing boat, an analyst said President Tsai Ing-wen (蔡英文) yesterday presided over a ceremony at Yilan County’s Suao Harbor (蘇澳港), where the navy took delivery of two indigenous Tuo Chiang-class corvettes. The corvettes, An Chiang (安江) and Wan Chiang (萬江), along with the introduction of the coast guard’s third and fourth 4,000-tonne cutters earlier this month, are a testament to Taiwan’s shipbuilding capability and signify the nation’s resolve to defend democracy and freedom, Tsai said. The vessels are also the last two of six Tuo Chiang-class corvettes ordered from Lungteh Shipbuilding Co (龍德造船) by the navy, Tsai said. The first Tuo Chiang-class vessel delivered was Ta Chiang (塔江)
EYE ON STRAIT: The US spending bill ‘doubles security cooperation funding for Taiwan,’ while also seeking to counter the influence of China US President Joe Biden on Saturday signed into law a US$1.2 trillion spending package that includes US$300 million in foreign military financing to Taiwan, as well as funding for Taipei-Washington cooperative projects. The US Congress early on Saturday overwhelmingly passed the Further Consolidated Appropriations Act 2024 to avoid a partial shutdown and fund the government through September for a fiscal year that began six months ago. Under the package, the Defense Appropriations Act would provide a US$27 billion increase from the previous fiscal year to fund “critical national defense efforts, including countering the PRC [People’s Republic of China],” according to a summary