Japanese telcos KDDI and Sumitomo will have to await the decision of China’s antitrust regulator before their acquisition of Jupiter Telecommunications can go ahead, TelecomFinance has learnt.
A spokesperson from Sumitomo said that they were in the…
Japanese telcos KDDI and Sumitomo will have to await the decision of China’s antitrust regulator before their acquisition of Jupiter Telecommunications can go ahead, TelecomFinance has learnt.
A spokesperson from Sumitomo said that they were in the process of filing an application due to antimonopoly laws in China and would announce more information on the deal in the near future.
As TelecomFinance reported back in October, the two telcos had offered to buy all remaining shares in Jupiter for Y216bn (US$2.71bn) and create a new merged company.
KDDI currently owns 30.71% and Sumitomo owns 39.98% of the leading Japanese cableco, but the companies wish to buy the remaining stake and then delist the company, according to the tender offer which was released on 24 October.
If the deal goes ahead, the new company will be equally owned and jointly managed by KDDI and Sumitomo.
As all three entities are Japanese companies, the application to China’s antitrust regulator suggests that Sumitomo is following through on its expansion plans.
Yoshio Osawa, head of Sumitomo’s media lifestyle division, told the Financial Times in October that the Jupiter deal would provide it with a springboard to expand into overseas markets, particularly in Asia.
“The TV business in emerging markets is exploding, just like it did in Japan 30 years ago,” he said in the report.
Goldman Sachs and Nagashima Ohno & Tsunematsu are advising Sumitomo during the tender process, and JP Morgan is advising KDDI. Nishimura & Asahi is acting as KDDI’s legal adviser.
In the November issue of TelecomFinance, François Renard, counsel in Allen & Overy’s Beijing office where he leads the China antitrust practice, said he thought that many topics still need to be clarified within Chinese antitrust regulations.
“The only decisions which are published are those with remedies, so the system is not very transparent,” he said. “It is a nascent antitrust authority, but it is getting more aggressive.
“Only approximately a third of remedied cases required similar remedies in other countries. Antitrust regulators in Japan and Korea are much more mature and sensitive to economic analysis than China.”
