Taiwan Mobile Co (台灣大哥大), the nation’s second-largest telecom, yesterday said it would acquire Taiwan Star Telecom Corp (台灣之星), the nation’s fourth-largest carrier, as the company aims to expand its customer base, and boost efficiency and competitiveness in the local market.
Taiwan Mobile aims to enlarge its spectrum of resources for greater economies of scale, the telecom said.
It also looks to achieve earnings and net-worth growth, as well as better customer satisfaction, the company said.
Photo: CNA
Taiwan Mobile, which had 7.11 million users as of the end of September, and Taiwan Star, which had 2.65 million users, would have a combined customer base of 9.76 million, the companies told a news conference in Taipei yesterday.
That would be higher than the 9.12 million users Far EasTone Telecommunications Co (遠傳電信) and Asia Pacific Telecom Co (亞太電信) have through a business partnership, the firms said.
Its combined customer base would come close to the 10.65 million users of Chunghwa Telecom Co (中華電信), the nation’s largest telecom, they said.
Photo: CNA
Taiwan Mobile said it is planning to issue 282.222 million new common shares that would be given to Taiwan Star shareholders in exchange for their shares.
The exchange ratio would be one Taiwan Star share for 0.04508 of its own shares, Taiwan Mobile said, adding that its calculations were based on Taiwan Star’s stock price as of June 30, expected merger synergies and comparable companies’ price-to-book ratios.
Taiwan Star would be dissolved after the merger, the companies said.
The deal is subject to approvals from a Taiwan Star shareholders’ meeting and regulatory authorities, they said.
The firms aim to complete the deal by Sept. 30 next year, but no later than Dec. 31, with the option of extensions if both parties agree, they said.
With the addition of Taiwan Star’s 5G licenses, Taiwan Mobile would own 100 megahertz of the 3.5 gigahertz frequency band, which would help speed up its promotion of 5G services to corporate clients, Taiwan Mobile president Jamie Lin (林之晨) said.
After the merger, Taiwan Mobile would terminate its 3G network and thousands of 4G base stations to avoid overlapping resources, which would help save significant amounts of energy, Lin said.
Taiwan Mobile would respect all contracts customers signed with Taiwan Star and hopes to gain support from regulators, he said.
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