PCCW and Telstra announce strategic alliance

PCCW announces plans to divest C&W HKT assets to Telstra to finance acquisition while selling own debt to Telstra.

Honkong's Pacific Century CyberWorks and Telstra, the telecommunications giant of Australia, have announced plans to enter into a strategic alliance that aims to merge and spin off the two companies' mobile and internet backbone businesses. The deal will see Telstra invest $1.5 billion in PCCW through the purchase of a convertible note. Telstra will also invest $1.5 billion into the newly merged regional mobile phone company as well as injecting mobile assets worth $1 billion.

This will give Telstra a 40% stake in the new mobile company with PCCW owning the remaining 60%. Moreover, the two companies have announced that they will merge their data IP businesses to create a company that...

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