FET to Acquire Fixed Line Affiliate

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Last Friday, Far EasTone Telecommunications’ (FET) board announced its intention to acquire 100% of fixed-line affiliate New Century InfoComm Tech (NCIC).  FET plans to spend up to NT$20.815 billion (US$646.8 million) to acquire the remaining 73.6% of NCIC that it does not already own.
A public tender offer by wholly owned subsidiary Yuan Cing Infocomm Tech of NT$10.93 per each of the outstanding 1.90 billion shares of privately held NCIC, known at retail as Sparq, began on Monday and will continue through August 16.  The tender offer can be extended for a maximum of 30 additional days.

Yuan Cing plans to raise capital for the purchase by issuing NT$15 billion in new shares that FET has agreed to fully subscribe to along with providing a loan of NT$5 billion.
This action gives third place FET the ability to offer complete wireline/wireless bundles in direct competition to former state monopoly Chunghua Telecom and Taiwan Mobile which had purchased fixed-line operator Taiwan Fixed Network Co in April of 2007.
“The company would like to enhance the business cooperation between fixed-line and mobile via group integration in order to provide more complete telecom service to consumers and even to reach the long-term synergy in operating cost,” Far EasTone said in a statement.
FET is also waiting on the Taiwan government to open its telecom industry to Chinese investment to complete the plan approved in April 2009 to sell a 12% stake valued at up to NT$17.77 billion (US$554 million) to China Mobile, the world’s largest mobile company by number of subscribers.