SEOUL -- SK Telecom(NYSE:SKM) announced that its Board of Directors held a meeting today and decided to acquire CJ O Shopping's 30 percent stake in CJ Hellovision for KRW 500 billion.
CJ O Shopping's remaining stake (23.9%) in CJ Hellovision can be later acquired by SK Telecom through call and put options between SK Telecom and CJ O Shopping.
Upon acquisition of CJ O Shopping's stake in CJ Hellovision, SK Telecom plans to push for merger of SK Broadband and CJ Hellovision. The swap/exchange ratio of CJ Hellovision shares and SK Broadband shares is fixed at 1:0.4756554. SK Telecom will have 75.3 percent stake in the merged entity, while CJ O Shopping will hold 8.4 percent.
The merger is scheduled to be approved at the Board of Directors Meeting of SK Broadband and CJ Hellovision to be held early next year. Upon successful completion of the merger, SK Broadband will be backdoor listed through CJ Hellovision, a listed company. The merger is expected be completed in April 2016. * Please note that the above-mentioned schedule is subject to change.
SK Telecom plans to set media as the main business of the merged entity and shape the company into the leading next-generation media platform player by offering diverse innovative/ground-breaking services based on cable TV - IPTV hybrid business models.
In addition, with the aim to strengthen its strategic alliance and cooperation with CJ Corporation, SK Telecom said that it will participate in paid-in capital increase (KRW 150 billion) of CJ Corporation through allotment to the third party.
Through the business reorganization, the two parties expect to generate synergies in content sourcing and international sales by integrating SK Telecom's strength in platform and CJ Corporation's strength in contents.
Meanwhile, SK Telecom and CJ Corporation will create two KRW 50 billion funds to boost the media and ICT industries' ecosystem.
The KRW 50 billion fund which will be created by SK Telecom (KRW 25 billion) and CJ E&M (KRW 25 billion) will mainly invest in media contents, while the other KRW 50 billion fund to be created by SK Telecom (KRW 25 billion) and CJ O Shopping (KRW 25 billion) will mainly invest in IT startups.
SK Telecom (Nasdaq: SKM)