SK buys Hanaro stake for $1.18b

Korea's biggest mobile company, SK Telecom, has won its battle to acquire broadband operator Hanaro Telecom.

Hanaro, the no. 2  largest broadband provider, has accepted SK Telecom's offer of 1.087 trillion won ($1.18 billion) for 38.89% of the company. The agreement is conditional upon on government approval.

 Under the agreement, SK Telecom will replace a consortium led by AIG and Newbridge as the largest shareholder in Hanaro, with 43.6% of the stock.  The US-led consortium took Hanaro out of bankruptcy in 2003 for $500 million, booking a profit of more than $600 million on the deal. 

The acquisition was largely welcomed by analysts, who said it gave the mobile operator greater scale and the ability to deliver convergence services. 

It comes a week after the board of Sprint-Nextel rejected a $5 billion offer from SKT and private equity firms for a stake in the US operator.

'I expect this change to bring new growth opportunities for the Korean IT industry,' said SK Telecom CEO Shin Bae Kim said. 'Building on our strong expertise in convergence business, we will strive to create new global business models such as developing wired and wireless integrated service with Hanaro Telecom.'