South Korea's SK Telecom has arranged to merge its fixed broadband subsidiary SK Broadband with the nation's second largest cable TV operator t-broad to help both companies weather rapid changes in the pay TV market.
Under the proposed merger, which still requires government approval, SK Telecom would take a 74.4% stake in the combined company.
Meanwhile t-broad's parent company Taekwang Industrial would take a 16.8% stake in the company, with the remaining held by financial investors, treasury stock and others.
The merger ratio has been set at 75:25 based on corporate valuation analysis, the companies said. The two companies have also attracted additional investment of 400 billion won from financial investor MiraeAssetDaewoo.
As of June 2018, t-broad had around 3.14 million subscribers. Adding SK Broadband's IPTV subscriber base of 4.54 million recorded at the same period, the combined entity would become a media company with around 8 million subscribers.
But the two companies could face difficulty securing competition regulatory approval for the merger due to this figure.