Taiwan Mobile has merged with Taiwan’s cable group kbro in a NT$32 billion ($1.0 billion) share swap with US private equity firm the Carlyle Group.
Carlyle swapped its majority stake in kbro for 15.5% of Taiwan Mobile, creating the island’s largest pay TV service provider, with 1.5 million subs, or 32% of the market, the investment firm said.
Under the deal Carlyle will become the second largest shareholder in Taiwan Mobile. The value of Carlyle’s kbro stake was not disclosed.
Taiwan Mobile said in an investor presentation the transaction would give it direct access to more than 1 million urban households and offer capex synergies.
It remains the island’s second largest mobile operator after Chunghwa Telecom.
Taiwan Mobile chairman Richard Tsai said that with the saturation of the island’s voice market, the deal “strengthens [Taiwan Mobile’s] ability to grow non-voice services and consolidates its long-term competitive strengths.” Convergence between mobile, fixed and cable would increase the company’s revenue from integrated content, he said.
Carlyle invested in cable firm Eastern Multimedia in 2006 and rebranded it as kbro. The cable operator is chaired by Craig Ehrlich, chairman of mobile industry group GSMA and a former head of Hong Kong cellco Sunday. Vice chairman and group CEO is Joseph Fan, a former president of Taiwan Mobile.
The deal is subject approval by Taiwan Mobile shareholders and Taiwan’s Fair Trade Commission and Investment Commission.