HomeAFPAustralia’s Telstra to acquire Digicel Pacific

Australia’s Telstra to acquire Digicel Pacific

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Australian telecommunications firm Telstra will buy Digicel Pacific for $1.6 billion, in a government-supported move reportedly aimed at shutting out China-backed players from acquiring the regionally dominant company.

Telstra announced Monday it had received $1.3 billion in funding from Canberra to buy the South Pacific’s leading mobile and internet provider, which operates in Papua New Guinea, Vanuatu, Fiji, Tonga, Samoa and Nauru.Australia’s government said the deal reflected its “Pacific Step-Up” commitment to support the development of secure and reliable infrastructure in the region.

“This is fundamentally in the interests of both Australia and our Pacific family,” a foreign and trade ministries joint statement said.

Canberra announced its renewed Pacific engagement strategy in 2018 as a political counterweight to China in the region, which has seen Australia offer greater financial aid to its developing neighbours.

The Australian Financial Review reported Canberra backed the Digicel acquisition amid concerns the strategically important asset could fall under Beijing’s control if a Chinese state-owned firm bought it.

Telstra, which will contribute $270 million of equity toward the purchase price, said the deal presents a “unique commercial opportunity”.

“The financial arrangements make it very attractive for Telstra and it strengthens our relationships with the Australian government and the Pacific region,” CEO Andrew Penn said.

The purchase from current owner and founder, billionaire Irish businessman Denis O’Brien, is expected to be completed within six months.

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