SK Telecom Signs Conditional Agreement to Acquire Hanaro Telecom

(Business News & Technology News, 4 Dec 2007)

SK Telecom has signed an agreement to acquire Hanaro Telecom, the nation's second largest broadband service provider. The agreement is conditional and dependent on government approval.

According to the agreement, SK Telecom will purchase 38.89 percent of Hanaro Telecom stake (91,406,249 shares) at a price of KRW11,900 per share or KRW 1.087 trillion in total. With the acquisition, SK Telecom will be the largest shareholder of Hanaro Telecom with a stake of 43.59 percent. SK Telecom said it would acquire management right of the company after government permission procedures.

SK Telecom expects the acquisition will help promote competition through wider range of new services and revitalize the currently saturated telecommunications market, ultimately delivering greater customer convenience and benefits.

SK Telecom CEO Shin Bae Kim said: "SK Telecom's acquisition of Hanaro Telecom will lead to greater market competition, which in turn will bring more benefits to customers. I expect this change to bring new growth opportunities for the Korean IT industry. Building on our strong expertise in convergence business, we will strive to create new global business models such as developing wired and wireless integrated service with Hanaro Telecom."

On November 14, SK Telecom was selected as a preferred bidder by Goldman Sachs, the lead investment bank in the deal. After completing three weeks of due diligence, SK Telecom held a board of directors meeting on November 30 and commissioned the final decision making authority to its representative director Shin Bae Kim.

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