Manila, Philippines Philippine Long Distance Telephone Co. has confirmed rumors that it will acquire a majority stake in Digitel Telecommunications Philippines Inc. operator of mobile network Sun Cellular, from the Gokongwei family. The PLDT group, which already operates three mobile brands Smart, Talk N’ Text and Red Mobile will gain an extra 15 million subscribers with the acquisition for a total of about 60 million users. This will give it a commanding lead in the telecom sector, with seven out of every 10 mobile subscribers being in the PLDT network. Its next biggest rival, Globe Telecom, has just over 23 million subscribers. “Through this initiative alters the country’s telecom landscape, we expect competition within the industry to remain very robust given that other operators, including new entrants are formidable and well-funded” PLDT chairman Manuel Pangilinan said in a statement. PLDT will issue 69.2 billion worth of new shares, at 2,500 each, as a form of payment for the 51.5% stake in Digitel to Gokongwei holding firm JG Summit Holdings. Digital is also expected to conduct a tender offer for the 48% of Digitel shares still held by minority stockholders at 1.60 per share, this exercise will bring acquisition cost to 74.1 billion. What are the implications of PLDT move to acquire Digitel? Elaborate on at least two effects of Gokongwei’s failure in its bid of PLDT?
Manila, Philippines Philippine Long Distance Telephone Co. has confirmed rumors that it will acquire a majority stake in Digitel Telecommunications Philippines Inc. operator of mobile network Sun Cellular, from the Gokongwei family.
The PLDT group, which already operates three mobile brands Smart, Talk N’ Text and Red Mobile will gain an extra 15 million subscribers with the acquisition for a total of about 60 million users. This will give it a commanding lead in the telecom sector, with seven out of every 10 mobile subscribers being in the PLDT network. Its next biggest rival, Globe Telecom, has just over 23 million subscribers.
“Through this initiative alters the country’s telecom landscape, we expect competition within the industry to remain very robust given that other operators, including new entrants are formidable and well-funded” PLDT chairman Manuel Pangilinan said in a statement.
PLDT will issue 69.2 billion worth of new shares, at 2,500 each, as a form of payment for the 51.5% stake in Digitel to Gokongwei holding firm JG Summit Holdings. Digital is also expected to conduct a tender offer for the 48% of Digitel shares still held by minority stockholders at 1.60 per share, this exercise will bring acquisition cost to 74.1 billion.
- What are the implications of PLDT move to acquire Digitel?
- Elaborate on at least two effects of Gokongwei’s failure in its bid of PLDT?
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