AT&T Wireless Services Inc. said it signed an agreement to sell its ownership stake in Taiwanese mobile carrier Far EasTone Telecommunications Co. to the carrier’s majority shareholder, Far Eastern Group, for $330 million in cash.
Earlier this week, Far EasTone and KG Telecommunications, another Taiwanese mobile operator, announced details of an agreement to merge. Under the plan KG Telecom will become a 100-percent controlled subsidiary of Far EasTone, and Japan’s NTT DoCoMo Inc., also a shareholder in AT&T Wireless, will hold 4.9 percent of FarEasTone.
The AT&T Wireless transaction is expected to occur in two stages. First, AT&T Wireless will respond to a tender offer for Far EasTone shares by member companies of the Far Eastern Group and offer to sell about 76 percent of its stake. The tender period began today in Taiwan and is expected to extend until Oct. 20.
The remaining AT&T Wireless stake will occur in a second transaction, which is subject to regulatory approval and expected to close in the fourth quarter. If the deal does not receive regulatory approval, AT&T Wireless will gradually divest its Far EasTone shares at regular intervals through 2005.
“The sale of our interest in Far EasTone is part of our ongoing plan to monetize our non-North America assets,” said Jordan Roderick, president of international at AT&T Wireless.
The agreement between Far EasTone and DoCoMo includes a memorandum of understanding to collaborate on W-CDMA and i-mode technologies in Taiwan. The merger of the two Taiwanese operators will allow the combined company to better compete with market leaders Chunghwa Telecom and Taiwan Cellular Corp., market watchers said.
Far EasTone, Taiwan’s third-largest mobile operator, currently has 4.3 million GSM subscribers.
