Taiwanese telco Far EasTone and Morgan Stanley are reportedly close to striking a $2.3 billion deal with MBK Partners to acquire Taiwan’s largest cable operator, China Network Systems.
The deal would allow Far EasTone to provide a bundled package of phone and cable services. The company believes this would allow it to bring costs down for consumers and provide a broader range of services.
The Wall Street Journal reports the parties have already signed a memorandum of understanding and are in the final stages of working out the full agreement.
China Network Systems is the dominant cable provider in many major Taiwanese markets including Taipei, Taiwan’s capital city. The company has 1.3 million subscribers overall, 1 million of which are fully digital customers, as well 250,00 broadband customers
In order for telcos and cable companies keep up with content costs and mobile video demand, they have had to become more diversified to keep up with over-the-top providers such as Netflix. A trend of consolidation has swept the industries throughout the world.
In the U.S., AT&T and DirectTV are very close to solidifying a $49 billion deal. T-Mobile US and Dish Network have been rumored to be discussing a merger for quite some time. T-Mobile US’ parent company, Deutsche Telekom, has reportedly been shopping the “uncarrier” around to many different potential suitors including Comcast.
Investors outside the industry have also been trying to get a piece of the action. Liberty Global has shown interest in adding mobile assets to its European holdings, according to The Wall Street Journal.
MBK Partners, a private equity fund-management firm, has done quite well with its investment since acquiring China Network Systems in 2007. It has reportedly returned substantial capital to its investors.
