IMDA approves StarHub's acquisition of 50.1% stake in MyRepublic's broadband unit

LOCAL telco StarHub CC3 has been granted regulatory approval by the Infocomm Media Development Authority (IMDA) on Wednesday (Mar 9) to acquire a 50.1 per cent stake in MyRepublic's broadband unit.

In its decision on the proposed consolidation, IMDA found that the move could result in a horizontal consolidation as both companies compete in public Internet access services, Internet protocol telephony services and managed data network services.

Still, it found that the move was unlikely to substantially lessen competition in any of the identified markets.

Post-acquisition, StarHub had 34 per cent of broadband market share while MyRepublic had 6 per cent as at September last year. The market leader, Singtel, held 43.4 per cent of broadband market share, or 656,000 subscribers in the same period.

IMDA said that the merger could allow StarHub and MyRepublic to compete more effectively with competitive prices or more innovative services.

It also noted that there will still be other competitors within the different market segments. For instance, the residential broadband market will have at least 5 other service providers post-acquisition.

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StarHub had announced its plans to acquire control of MyRepublic Broadband in September last year for an initial consideration of S$70.8 million.

If certain financial performance metrics are made, StarHub could invest a further S$92 million into its stake. StarHub will also have the option to acquire the remaining 49.9 per cent stake in MyRepublic Broadband from MyRepublic in the future.

At the time, StarHub said that MyRepublic's broadband customer base could gain access to its consumer and enterprise business offerings. It also expects to benefit from joint synergies in terms of joint go-to-market opportunities, future wholesale offerings and cost savings.

StarHub shares traded flat at S$1.25 as at 3.22 pm on Thursday.

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