LG U+ to acquire cable company CJ HelloLG U+ announced Thursday that it has signed a deal to acquire Korea’s largest cable TV company CJ Hello, strengthening its position in the paid TV market.
The mobile carrier’s board approved the 800 billion won ($711 million) acquisition of 50 percent plus one share of CJ Hello from CJ ENM, its parent company.
The purchase is expected to also give the company a stronger foothold in the content business.
Currently in fourth place in the paid TV market in terms of market share, LG U+ will jump to second with a 24-percent share. KT and its subsidiary KT Skylife control more than 30 percent, while SK Telecom subsidiary SK Broadband owns nearly 14 percent.
CJ Hello currently has 4.2 million cable subscribers and 790,000 mobile carrier users.
“Through the acquisition of CJ Hello shares, [we] plan to lead the convergence of broadcast media, promote competition in the stagnant media market and lead the 5G future,” said Lee Hyuk-ju, LG U+’s chief financial officer.
The acquisition comes as LG U+ is aggressively pushing into the paid TV market. Paid TV services in Korea include cable TV, satellite TV and internet protocol TV (IPTV).
In November, LG U+ launched a partnership with Netflix to provide the U.S.-based company’s content through its IPTVs. The streaming service has proven hugely popular in the Korean market with 1.27 million Android users in December last year, growing 274 percent from the beginning of the year according to mobile app tracker WiseApp.
The telecommunications company’s IPTV subscribers rose to over 4 million in the fourth quarter last year, increasing 13.5 percent compared to the previous year.
LG U+’s purchase of CJ Hello is pending government approval.
Under the country’s communications and fair trade laws, the deal requires further approval from the Fair Trade Commission, the Ministry of Science and ICT and the Korea Communications Commission. In 2016 SK Telecom’s attempt to purchase CJ Hello, then CJ HelloVision, was barred on the grounds it hurt fair competition.
The deal will leave CJ ENM with a 3.92 percent share of the cable TV company. CJ ENM said in a statement it will focus on strengthening its premium content business and global market through the sale.
LG U+ is not the only company looking to increase its stake in the paid TV market as IPTV companies look to acquire existing cable TV companies to bolster their content offering in the growing sector. KT and SK Telecom haven’t revealed plans but are reportedly considering acquiring smaller cable TV companies like D’Live.
BY CHAE YUN-HWAN [email@example.com]