HTHKH to buy full control of mobile business
In this article (5)
Hutchison Telecommunications Hong Kong Holdings (HTHKH) has arranged to buy out Japan’s NTT Docomo‘s share of its mobile businesses for $60 million.
Under the agreement, HTHKH will acquire Docomo’s 24.1% interest in Hutchison Telephone Company Limited (HTCL) and its 24.1% stake in Hutchison 3G Hong Kong Holdings (H3GHK), making both companies wholly-owned subsidiaries.
In an announcement, HTHKH said acquiring full control of its mobile business will increase the value of HTHKH shares, enhance operational efficiency and save costs by eliminating resources expended on shareholder communications.
The transaction is expected to close on May 31. HTHKH plans to use the proceeds from the disposal of its fixed line business in 2017 to pay for the purchase.
HTHKH and Docomo have agreed to discuss potential ways of extending their mutually beneficial relationship despite no longer being tied through a shareholder relationship.
The companies have agreed to enter a consultation and cooperation agreement upon the closing of the transaction to explore the feasibility of collaboration in the field of mobile telecommunications products and services.
Questions & Answers
Q.What is HTHKH's reason for buying out NTT Docomo?
What is HTHKH's reason for buying out NTT Docomo?
HTHKH stated that acquiring full control will increase the value of its shares. It also expects to enhance operational efficiency and save costs by removing shareholder communication expenses.
Q.When is the transaction expected to be finalised?
When is the transaction expected to be finalised?
The transaction is expected to officially close on May 31. After this date, Hutchison Telephone Company Limited and Hutchison 3G Hong Kong Holdings will become wholly-owned subsidiaries of HTHKH.
Q.How will HTHKH fund this purchase?
How will HTHKH fund this purchase?
HTHKH plans to use the money it received from selling its fixed line business in 2017 to pay for this acquisition. This disposal provided the proceeds necessary for the current transaction.