South Korean Leading Telecommunications Company SK Telecom Acquires The Country’s Largest Cable Firm CJ HelloVision
Industry sources claimed on Sunday that South Korea's leading telco company, SK Telecom, will be joining the broadcast market as it acquires the country's largest cable television operator, CJ HelloVision.
According to Korea JooingAng Daily on Monday, SK Telecom's acquisition of CJ HelloVision is the first time a wireless telecommunication operator has secured a cable TV firm.
CJ HelloVision has over 14 million cable TV subscribers and 2.4 million Internet service subscribers. It is also the No. 1 mobile virtual network operator (MVNO) of the low-end mobile telecom service, altteul phones.
With the telecommunication firm's success in the industry, the acquisition price for CJ HelloVision is expected to hit around $1.31 billion. SK Telecom reportedly plans to close the mergers deal by April 2016.
SK Broadband is set to become the No. 2 paid cable broadcaster in South Korea, with an expected 7.5 million subscribers in the Internet Protocol Television (IPTV) business.
During the board meeting, SK Telecom will hold 30 percent stake from CJ HelloVision's parent firm, CJ O Shopping and plans to buy the remaining 25.3 percent stake in the cable channel provider, noted Korea Herald in their article on Monday.
South Korea's leading telecommunications operator will reportedly own 75.3 percent stake in total of the SK Broadband Co. subsidiary once the acquisition process has been finalized next year.
Analysts deem the move of both companies as an effort to transform their business portfolios and highlight their strengths in the industry.
"SK Telecom's acquisition of stake in CJ HelloVision, the leading player in the media industry, is expected to contribute to the advancement and convergence of the broadcasting and network infrastructure, thereby generating synergies in the media business," says Executive Vice President and Head of Strategic Planning Division at SK Telecom, Hwang Keun Joo.
"Moreover, strong partnership between SK Telecom and CJ Corporation will lead us to innovative next-generation platforms going beyond the media industry through convergence and integration of telecommunications, devices and contents."