OFCA expands review of HKT’s CSL buyout

2 Jan 2014

Hong Kong’s Office of the Communications Authority (OFCA) has revealed that it is widening its review of the recently proposed acquisition of 100% of the shares of cellco CSL New World Mobility by rival full-service operator Hong Kong Telecommunications (HKT), part of PCCW. OFCA announced on 24 December 2013 that it was opening a one-month public consultation to gather feedback on the USD2.4 billion deal. It has now emerged that the watchdog is also hiring a third-party consultant to carry out a full investigation into the potential competition effects of the acquisition and whether it would give HKT too much of a dominant position in Hong Kong’s communications markets. OFCA says its review is likely to last more than three months and this will impact on HKT’s proposed timing for the takeover, as the company said it hoped to have completed the transaction by March 2014.

As reported by CommsUpdate last month, Telstra of Australia has agreed to sell its 76.4% stake in CSL for approximately AUD2 billion (USD1.86 billion), subject to impacts of foreign currency and completion adjustment, while HKT will acquire the other 23.6% in CSL held by New World Development, bringing the total value of the deal to USD2.425 billion.

Hong Kong, CSL (now part of HKT/PCCW), HKT/PCCW (incl. CSL)