Reliance Gateway to acquire Flag Telecom for USD207 million
22 October 2003 London Lightwave Europe -- Network transport and communications services FLAG Telecom Group has entered into an Agreement and Plan of Amalgamation with Reliance Gateway Net Private Limited, a subsidiary of Reliance Infocomm Ltd.
22 October 2003 London Lightwave Europe -- Network transport and communications services providerFLAG Telecom Group has entered into an Agreement and Plan of Amalgamation with Reliance Gateway Net Private Limited, a subsidiary of Reliance Infocomm.
Reliance Gateway will acquire 100% of FLAG's common shares for an aggregate purchase price of USD 207 million, reflecting a per share price of USD 95.61. The Amalgamation Agreement was unanimously approved by both companies' boards of directors.
Patrick Gallagher, Co-Chairman and CEO of FLAG Telecom, said, "We believe this premium offer by Reliance to acquire FLAG represents a strong endorsement of our operating strategy and is in the best interests of our shareholders.
Reliance is already a key customer on the FLAG global network, one of the most extensive in the world today. We believe that this agreement with Reliance underscores the confidence they have in the future of FLAG and we look forward to the successful consummation of the transaction."
This agreement is an important first step towards concluding the acquisition of FLAG Telecom, which is subject to certain conditions, including the receipt of regulatory approvals and the approval of FLAG Telecom's shareholders. A meeting of FLAG Telecom's shareholders is expected to be held in December 2003 to approve the amalgamation.
About FLAG Telecom
FLAG Telecom Group Limited has an established customer base of more than 180 leading operators, including all of the top ten international carriers. FLAG owns and manages an extensive optical fibre network spanning four continents and connecting key business markets in Asia, Europe, the Middle East and the USA.
FLAG also owns and operates a low latency global MPLS based IP network, which connects most of the world's principal international Internet exchanges. FLAG offers a focused range of global products, including global bandwidth, IP, Internet, Ethernet and Co-location services.
Reliance Group, founded by Shri Dhirubhai H. Ambani (1932-2002), is India's largest business house with total revenues of USD16.8 billion, cash profit of USD2.1 billion, net profit of over USD990 million and exports of USD2.5 billion.
The group's activities span exploration and production (E&P) of oil and gas, refining and marketing, petrochemicals (polyester, polymers, and intermediates), textiles, financial services and insurance, power, telecom and infocom initiatives. Reliance emerged as India's Most Admired Business House, for the second successive year in a TNS-Mode survey for 2002.
The Reliance Group Companies include: Reliance Industries Limited, Reliance Capital Limited, Reliance Industrial Infrastructure Limited, Reliance Telecom Limited, Reliance Infocomm Limited, Reliance General Insurance Company Limited, Indian Petrochemicals Corporation Ltd. and BSES Lqqd.