Freshfields, KWM and Gibson Dunn advise on $2.4bn HK telecoms deal

Freshfields Bruckhaus Deringer, Gibson Dunn & Crutcher and King & Wood Mallesons have secured roles on Hong Kong Telecommunications’ (HKT) $2.4bn (£1.5bn) acquisition of CSL from Telstra.

HKT instructed Gibson Dunn’s Hong Kong corporate partner Graham Winter for the transaction. Winter joined the US firm from Reed Smith Richards Butler in 2011 (3 November 2011). During his time at Reed Smith, Winter worked with PCCW on many major transactions, including PCCW’s $2.1bn privatisation in 2008 and HKT Trust’s $1.5bn IPO.

Telstra has turned to its longstanding adviser King & Wood Mallesons for the deal. The firm’s team is led by Hong Kong corporate partner Joshua Cole, who has been working with the Australian telecom giant since 1997, Melbourne corporate partner Stephen Minns and Sydney tax partner Justin Cherrington.           

HKT is a listed subsidiary of Hong Kong tycoon Richard Li’s PCCW. It sold Hong Kong mobile operator CSL to Australia’s Telstra over a decade ago. HKT will now buy back CSL for $2.4bn in a deal that will increase its share of Hong Kong’s mobile telecoms market to 31 per cent. The deal will also reduce the number of mobile operators in the city from five to four.

Telstra owns 76.4 per cent of the stake in CSL. HKT will acquire the remaining 23.6 per cent in CSL from New World Development, which is represented by Freshfields. The magic circle firm’s team in this transaction is led by Hong Kong corporate partner Simon Weller and also consists of China chair Teresa Ko and competition partner Jenny Connolly.

“This is a significant deal, not only because of its deal value and the participants, but also because it will reduce the major mobile players from five to four and change the competition in the market,” said a source close to the deal. “It is important to see how Hong Kong’s Communications Authority will react to the transaction and what conditions it will require to approval the deal.”

The deal is subject to regulatory approval in Hong Kong, including approval from industry regulator the Communications Authority.