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China Mobile to buy $566m Far EasTone stake
28 April 2010
China Mobile, headed by Wang Jianzhou, is expected to take a 12% stake in Taiwan’s Far EasTone for $566m
The board of Far EasTone Telecommunications in Taiwan is selling around 444 million new shares to China Mobile for $566 million. The plan was first approved in April 2009 when China Mobile, the world’s largest mobile operator by number of subscribers, planned to buy a 12% stake in Far EasTone.
The transaction was halted then as the Taiwanese government did not approve the sale. The island does not permit Chinese companies to invest in its telecom sector.
The board of Far EasTone board had to re-approve the plan for the private placement with China Mobile, as the one-year period for private placement will expire soon.
The board also agreed to boost the firm’s capital spending by 38% to $282 million in 2010 from $204 million last year. Half of the amount will be spent on capacity enhancement. GTB