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LG Uplus signed a deal to acquire CJ Hello, the nation's largest cable television operator, for 800 billion won ($711 million) in a bid to secure competitiveness in the rapidly changing subscription TV market, the mobile carrier said Thursday.
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| LG Uplus CEO Ha Hyun-hwoi |
LG Uplus held a board meeting earlier in the day to approve the purchase of CJ ENM's 50 percent plus one share stake in CJ Hello.
CJ ENM, the entertainment and media content arm of CJ Group, had held a 53.9 percent stake in CJ Hello.
"Through the takeover of the stake in CJ Hello, we will lead the convergence of broadcasting and telecommunications, and promote services competition in the stagnant market," said Lee Hyuk-ju, chief financial officer and executive vice president at LG Uplus. "The latest contract will be an opportunity to take a step forward in the growth of the nation's subscription TV market in quality."
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| CJ Hello CEO Byun Dong-sik |
In 2015, the FTC did not approve SK Telecom's bid to acquire CJ Hello on concerns over a monopoly and oligopoly in the subscription TV market. But industry watchers say LG Uplus is likely to get approval from the FTC this time as the corporate watchdog has shown a change in its attitude.
The telecom firm said it will submit request for permission to the government agency in 30 days.
If the firm completes the acquisition of CJ Hello, it will become the No.2 pay TV service provider with about 24 percent share after KT Group that encompasses KT and KT Skylife.
As of last year, CJ Hello possessed about 4.2 million subscribers of its cable TV, while LG Uplus had 4 million subscribers of its IPTV.
LG Uplus' takeover of CJ Hello will lower the rank of SK Telecom in the subscription TV market from second to third, while threatening the No. 1 position of KT Group with about a 30 percent market share.
This would trigger competition among mobile carriers to acquire cable television operators.
According to industry sources, SK Telecom is moving to acquire T-Broad and KT has its eyes set on D'live.
