Caribbean Community and Common Market (Caricom) plans to launch a probe into Cable & Wireless Communications’ (LON:CWC) US$1.85bn acquisition of local cableco Columbus International.In a statement, the Commission said that it “has completed its…
Caribbean Community and Common Market (Caricom) plans to launch a probe into Cable & Wireless Communications’ (LON:CWC) US$1.85bn acquisition of local cableco Columbus International.
In a statement, the Commission said that it “has completed its preliminary examination of the agreement and has reached the conclusion that an investigation is warranted.”
The regulator will hold consultations with the relevant member states to determine and agree on its jurisdiction to investigate the deal, which was completed on 31 March.
The watchdog expects the consultation phase to be carried out “in a timely manner”, and will then provide an update on its next steps, Caricom said.
CWC had agreed the purchase – from Clearwater Holdings (Barbados) Limited, CVBI Holdings (Barbados) Inc., Columbus Holding LLC, Brendan Paddick and others – on 6 November.
To gain clearance from the Trinidad & Tobago telecoms watchdog, CWC agreed to divest its 49% stake in national incumbent TSTT within 18 months.
Barbados’ Fair Trading Commission (FTC) approved the merger, on the condition that CWC offloaded “the overlapping, duplicate elements of the combined fibre network in Barbados.”
CWC CEO Phil Bentley, described the takeover as “a transformational deal”. The companies believe that the acquisition enables greater focus on the Caribbean, Andean and Latin American markets, providing new opportunities in Colombia, Guatemala, Costa Rica, Honduras, El Salvador, Dominican Republic, Puerto Rico and Peru.
However, opponents to the merger have voiced concerns that it will lead to reduced competition and increased prices for consumers.
CWC’s competitor, Jamaica-based Digicel, also strongly opposed the merger, and appealed to regulators in Caribbean markets to examine the transaction thoroughly.
Columbus, which trades as Flow, is present in Trinidad & Tobago, Jamaica, Barbados, Grenada and Curacao. It trades as Karib Cable in Saint Lucia, Saint Vincent & the Grenadines and Antigua & Barbuda.
Evercore advised CWC, while JPMorgan provided debt financing in the form of a US$460m senior secured two-year bridge facility, a US$300m senior unsecured two-year bridge facility, a US$404m senior secured two-year bridge facility, a US$1.26bn senior unsecured on-year bridge facility and a US$500 senior secured revolving credit facility.
Columbus was advised by Citigroup, JPMorgan and RBC Capital.
