Telstra buys Digicel Pacific for $ 1.6 billion

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Telstra Corp Ltd has agreed to purchase the Pacific operations of telecommunications company Digicel Group from Denis O’Brien in a widely funded $ 1.6 billion (€ 1.37 billion) deal by the Australian government and seen as a way to block China’s growing influence in the region.

The government will cover $ 1.33 billion of the total value, with Telstra contributing the rest, the Australian telephone company said and a government statement.

As China grows its influence in the region and months of market and media speculation surround Digicel’s future, Telstra said the Australian government has approached him to help buy the company.

A sale of Digicel to a Chinese company would be of concern to the Australian government.

“The acquisition also reflects the government’s commitment, as part of its Pacific Step Up, to support the development of safe and reliable infrastructure in the region, which is essential to the economic growth and development of the region of Pacific, “said several government ministers. noted.

Telstra will fully own and operate Digicel’s Pacific operations, he said. Digicel, founded by Mr. O’Brien, is the largest mobile operator in the Pacific, with operations in Papua New Guinea, Fiji, Samoa, Vanuatu and Tahiti – the most lucrative being those in Papua -New Guinea. The deal includes a $ 250 million earn-out clause, subject to the performance of the business unit over three years, which could increase the overall value of the deal, Digicel said in a statement. The transaction, subject to various government and regulatory approvals, is expected to take up to six months, according to Telstra and Digicel.

Commenting on the deal, Mr O’Brien said: “I am very pleased that today’s deal with Telstra, our very close neighbor in the Pacific, further improves the infrastructure, data and links of DPL (Digicel Pacific Limited) call termination with one of Australia’s largest and most reliable networks. . . I remain committed to ensuring a successful transition in my current role as director of the newly formed holding company for DPL.

“From Digicel’s point of view, today marks the very successful completion of a strategic investment following our entry into the South Pacific in 2006”. – Reuters


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