LG Telecom receives shareholders approval to merge with LG Dacom and LG Powercom
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[November 30, 2009]

LG Telecom receives shareholders approval to merge with LG Dacom and LG Powercom

Nov 30, 2009 (Datamonitor Financial Deals Tracker via COMTEX) -- Update on November 27, 2009: LG Telecom, Ltd., a provider of mobile and wireless internet services, has received its shareholders approval to merge with LG Dacom Corp. and LG Powercom Corp. All the three companies are based in South Korea.



LG Dacom is an internet/data communications services provider, while LG Powercom is a provider of broadband internet and telephone services.

Announcement (October 15, 2009): LG Telecom has agreed to merge with LG Dacom and LG Powercom.



Under the terms of the agreement, LG Telecom will offer 2.149 shares of its common stock for each LG Dacom share and 0.742 shares for every LG Powercom share.

Morgan Stanley is acting as financial advisor to LG Telecom.

The combined company is expected to begin operations from January 1, 2010.

Deal Type Merger Deal Status Announced: 2009-10-15 Deal Participants Target 1 (Company) LG Dacom Corporation Target 2 (Company) LG Powercom Corp.

Target 3 (Company) LG Telecom, Ltd.

Deal Rationale The merger will combine the marketing and retail distribution capabilities of LG Telecom with the VOIP and IP product platform and the corporate client base and operational know-how of LG Dacom and the nationwide fiber optic network coverage of LG Powercom. The combined company will be able to leverage a bigger customer base, strengthen its service offerings and better compete with rivals.

The transaction will simplify the corporate structure of the three companies and create new opportunities from technological convergence.

The deal is expected to result in cost savings of 1.5%-2% of the combined revenues. The combination will result in decreased marketing costs due to the lower churn-out from bundled customers, reduction of network OPEX through facility integration and reduction in billing, call center, IT and other overhead costs.

The merger is expected to create a unified company with KRW7,200,000,000 million ($6,209.99 million) in annual revenue and an operating profit of around KRW900,000 million ($776.25 million).

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