Sat, Aug 30, 2003 - Page 1 News List

KG Telecom calls off merger plans


A proposed merger between Far EasTone Telecommunications Co (遠傳電信) and KG Telecommuni-cations Co (和信電訊) that would have produced the nation's second largest mobile service operator was called off yesterday.

KG Telecom said that Far Eas-Tone had failed to come up with a detailed plan for the merger.

The two companies signed a letter of intent on July 17. Under the agreement, Far EasTone, the nation's third largest mobile-phone service carrier, would spend about NT$30 billion in a cash-and-stock swap to acquire KG Telecom, the fourth largest.

Far EasTone originally hoped to complete due diligence on KG Telecom by last week before officially taking over the latter's business. But Far EasTone recently informed KG Telecom that it hoped to postpone the merger without explaining why.

In response, KG Telecom asked Far EasTone to propose a new plan by Thursday to be discussed at KG Telecom's board meeting that day.

"Since they failed to respond to our request on time, we decided not to continue the partnership with them," KG Telecom said in a statement.

Leslie Koo (辜成允), chairman of KG Telecom, said he had every confidence in the company, which had seen sales grow 13 percent in the first half of the year from a year ago.

Far EasTone could not be reached for comment.

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