Hanaro’s acquisition could be first of many

When well-known merger and acquisition lawyer Park Byung-moo was named the new president of the nation’s second-largest broadband service provider, Hanaro Telecom Inc., the communication industry was soon abuzz with takeover talk. And so when Hanaro said it was to buy a 65-percent stake in Celrun TV, the video-on-demand subsidiary of the local set-top box maker Celrun Co., for 5.5 billion won ($5.7 million), industry watchers were not surprised. The Internet service provider said in a recent regulatory filing that it signed a memorandum of understanding with Celrun on the share purchase and other bilateral cooperation. The deal makes Hanaro Telecom the largest shareholder in Celrun TV, with all remaining stock owned by Celrun itself. Celrun TV was launched last year as a joint venture between its parent company and Japanese broadcasting company Orix. Buying the 65-percent stake is seen as a way to help Hanaro Telecom enter the Internet TV, or IP-TV, business. By plowing 13 billion won into Celrun, Hanaro said it will plans to boost the multimedia content company’s capital to 26 billion won from the current 6 billion won. Mr. Park, current head of Newbridge Capital Korea and a lawyer at Korea’s largest law firm, Kim & Chang, said previously that he intends to turn Hanaro Telecom into a media firm that combines Internet and multimedia content. An industry watcher said, “In order for Hanaro to change into a media corporation, it will need to acquire several more companies.” by Lee Hee-sung