Wed, Oct 08, 2003 - Page 1 News List

Far EasTone makes deal to acquire KG Telecommunications

By Kevin Chen  /  STAFF REPORTER

Far EasTone Telecommunications Co (遠傳電信) yesterday signed an agreement to acquire the KG Telecommunications Co (和信電訊) through a cash-and-stock swap deal, creating the nation's second-biggest mobile-phone network after a NT$30 billion bid failed earlier this year.

The proposed merger between the nation's third and fourth largest telecom operators will combine 7.75 million subscribers, the companies said in a statement.

"We have reached an agreement with Far EasTone this afternoon following board approvals from the two companies," May Wu (吳美慧), public relations manager at KG Telecom, said yesterday.

Under the agreement, each KG Telecom shareholder will receive NT$6.72 in cash and 0.46332 Far EasTone shares for each KG Telecom share. In total, KG Telecom shareholders will receive approximately 806 million Far EasTone shares and about NT$11.7 billion in cash, Wu said.

"The combined company will ... leverage the advantages of both companies to capture maximum potential synergies," Far EasTone chairman Douglas Hsu (徐旭東) said in a statement.

Far EasTone's preliminary agreement to buy KG Telecom lapsed in late August after it was unable to deliver an extension proposal by KG's deadline.

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