- Telstra (TLS) confirms it's in discussions with the Australian Government to purchase Digicel Pacific for a combined $2 billion
- According to an anonymous source speaking to The Sydney Morning Herald, the discussions aim keep Digicel from falling into Chinese ownership
- Despite confirming the discussions to the market this morning, the telco giant cautioned that it is still uncertain if the deal will go ahead.
- Just before the market opens this morning, Telstra last traded at $3.77 per share
Telstra (TLS) have confirmed it is in discussions with the Australian Government to purchase Digicel Pacific.
Digicel provides communications services across Papua New Guinea, Fiji, Nauru, Samoa, Tonga and Vanuatu.
According to an anonymous source speaking to The Sydney Morning Herald, the deal is valued at up to $2 billion and aims keep Digicel from falling into Chinese ownership.
While Telstra has confirmed the discussions with the Australian Government, it's said the talks are currently incomplete and the company is uncertain if the deal will go ahead.
Australia's largest telco company was initially approached by the Government to provide technical advice for Digicel Pacific, which it calls "a commercially attractive asset" that is "critical to telecommunications in the region".
"If Telstra were to proceed with a transaction it would be with financial and strategic risk management support from the Government," the company said.
"In addition to a significant Government funding and support package any investment would also have to be within certain financial parameters with Telstra’s equity investment being the minor portion of the overall transaction."
In calendar 2020, Digicel Pacific's South Pacific operations generated earnings before interest, taxes, depreciation, and amortisation of US$235 million (around A$318 million).
Just before the market opens this morning, Telstra last traded at $3.77 per share.