Australia’s Telstra has announced that, in partnership with the government, it has agreed to acquire Digicel Pacific, calling the deal ‘a unique and very attractive commercial opportunity for Telstra to boost [its] presence in the region’.
In a press release regarding the development Telstra confirmed that, with the purchase to cost a total of AUD2.1 billion (USD1.6 billion), it will contribute AUD270 million in equity, while the government has committed to providing a financing package through Export Finance Australia (EFA) totalling USD1.33 billion to support the acquisition. In its own statement regarding the deal, the government claimed that its involvement was ‘consistent with Australia’s longstanding commitment to growing quality investment in regional infrastructure’, while confirming that the financial package will include debt and equity like securities designed to secure the state a long-term return on its financing.
Further, Telstra has confirmed that it will own 100% of the ordinary equity of Digicel Pacific – which reportedly has around 2.5 million subscriptions on its books across Papua New Guinea (PNG), Nauru, Samoa, Tonga, Fiji and Vanuatu – when the deal completes. Digicel Pacific will continue to be run as a separate business within Telstra’s ‘International division’, while ‘maintaining separate P&L and IT systems’. Further, it has also been confirmed the Digicel brand will be retained, while the existing Digicel Pacific management will continue the day-to-day running of the business.
Following the deal’s announcement, Telstra will now reportedly engage with governments in Digicel’s operating jurisdictions regarding regulatory requirements and approvals.