Citic Telecom International Holdings Limited (Citic Telecom) is acquiring a control stake in Companhia de Telecomunicações de Macau (CTM) for $1.16 billion.
Citic Telecom, a subsidiary of Hong Kong-based Citic Pacific, has agreed to buy 51% of CTM from Cable & Wireless Communications for $749.7 million and 28% from Portugal Telecom for $411.6 million.
The acquisitions will increase Citic Telecom’s stake in CTM from 20% to 99%, giving it an opportunity to take control of Macau’s incumbent carrier. Macau Post will hold the remaining 1% stake in CTM, being an entity controlled by the Macau government.
In May 2010, Citic Telecom bought 20% of CTM from its Hong Kong-listed parent, Citic Pacific.
The deal must be approved by the governments of Macau and China, as well as shareholders of Citic Telecom and Cable & Wireless.
Citic Telecom will fund the deal through its own cash and bank loan facilities. Upon completion of the acquisitions, CTM will become a subsidiary of Citic
Telecom, the company said in a filing to Stock Exchange.
CTM, which was established in 1981, provides mobile, fixed line and broadband services in Macau and is a major supplier of enterprise telecom services to corporate customers in Macau. As of November 30, 2012, the unaudited net asset value of CTM was approximately MOP1.721 billion ($215.5 million).