Lee & Ko successfully advised as lead counsel in SK Broadband’s triangular acquisition of T-broad, a multiple system operator, and its subsidiaries T-broad Dongdaemun and Korea Digital Cable Media Center. Shares to be held by existing shareholders of T-broad (excluding Taekwang Co., Ltd.) will be sold to certain financial investors. The transaction is a large deal in which total equity value of SK Broadband’s acquisition of Target Companies exceeds 5 trillion won. Through this transaction, SK Broadband seeks to maximize its business synergy by gaining access to, and utilizing, two platforms of IPTV and CATV. The merger agreement of this transaction was executed on April 26, 2019.
This complex transaction involves various legal issues including: (i) in a regard that it is merger between non-affiliate companies, computation of the purchase price and various issues relating to the transaction structure, (ii) in a regard that Target Companies are involved in licensed business as a system operator, obtaining permits from government authorities involving approval of change of largest capital investor and change of license as a system operator, (iii) in a regard that Target Companies are involved in telecommunications carrier business, public interest review and merger approval by the KFTC, (iv) restrictions to be imposed on SK Telecom Co. as a holding company in regards to its ownership of shares in SK Broadband to which, as a result of this transaction, Target Companies become subsidiaries, and (v) merger filing. Lee & Ko’s M&A team, providing advice on various legal, taxation and license/permit issues, coordinated extensively throughout the transaction which also included execution of share purchase agreement and shareholders’ agreement with the prospective FIs.