The battle to acquire third ranked mobile operator Meteor is over, with Eircom emerging the successful bidder. The telecoms firm has agreed to acquire Meteor from Western Wireless International for €420m. Completion is expected towards the end of the year.
The acquisition marks Eircom’s return to the mobile market. It sold its mobile arm, Eircell, to Vodafone in 2001. For the past year or more it had made no secret of its intention to re-enter the mobile market at the earliest opportunity, thus becoming the only player with a full fix-to-mobile offering. Eircom believes the acquisition will accelerate its growth strategy and increase the size of the telecoms market available to it from €2bn to approximately €4bn.
Dr Philip Nolan, chief executive of Eircom, commented: “The acquisition of Meteor gives Eircom a winning combination of broadband and mobile. This has been our goal since returning to the market last year. We look forward now to providing our unrivalled base of 1.4 million customers with our newly acquired mobile capability, as the only company which can offer Irish consumers the full range of services – voice and data, over landline and mobile.”
Meteor is Ireland’s third largest operator and is Ireland’s fastest growing mobile business, doubling its subscriber base from 181,000 to 410,000 in the past 18 months.
Eircom is looking to double Meteor’s current market share of 10pc within three to four years by continuing to be the low-cost operator. Eircom will also expand Meteor’s reach into the post-paid market, which currently accounts for only a tiny fraction of its revenues.
The acquisition would be fully funded by a rights issue, subject to shareholder approval, at a minimum subscriber price of €1.10 per share, the company confirmed in a statement this morning.
The Employee Share Ownership Trust (ESOT) which holds 20.9pc of Eircom’s shares said it would vote in favour of the acquisition and the rights issue and has stated that it intends to take up its share entitlements in full.
The acquisition of Meteor and the rights issue are both conditional upon the approval of Eircom’s shareholders with completion expected towards the end of 2005.
Commenting on the proposed acquisition, Sir Anthony O’Reilly, chairman of Eircom, said: “Winning the bid for Meteor delivers on our promise to lead Eircom back into mobile. The acquisition will transform the growth prospects for Eircom, which is good news for our shareholders and for our employees. Customers will benefit from our determination to ensure that Irish mobile users get a fair deal.”
By Brian Skelly
