No more Flow?
LIME completes 100 per cent buy out of former telecoms rival
In the wake of last week’s approval by the Fair Trading Commission (FTC), Cable and Wireless Communications, Plc (CWC), which trades here as LIME, today announced that it had completed its US$1.85 billion acquisition of 100 per cent of the equity of Columbus International Inc, which operates in Barbados as Flow.
The disclosure came in a media release from C&W in which Chief Executive Officer Phil Bentley further revealed that as part of the integration process, the company was undertaking “a full review of all the brands we currently operate under, including the Flow and LIME brands, as well as the business and wholesale brands”.
However, he said, “no decision has yet been made”.
The megadeal, which Bentley describes as “a transformational deal” for C&W, was first announced last November. It has seen to the company’s successful take over of Columbus, which came to the island just over a year ago, ironically after a takeover of TeleBarbados and Karib Cable, and had been busy expanding its fibre footprint, as well as establishing itself as a credible third player in the highly competitive sector, in which Digicel remains a key player.
“This is a transformational deal for Cable & Wireless Communications. Columbus Communications is an outstanding business; not only do we add significant fibre optic submarine backhaul and terrestrial broadband and TV capability to our leading mobile and legacy copper networks in the Caribbean, but our complementary B2B divisions can now offer geographical focus and a wider product offering in the faster-growing Latin American markets,” noted Bentley.
“We expect the operating synergies to be significant; together, the new merged company creates the opportunity to invest more, grow faster, and provide an improved customer experience and, most importantly, a development opportunity for our people that either company could never have achieved on their own,” the C&W top official said.
He noted that there had been an extensive and professional regulatory review, with appropriate remedies, adding, “we are pleased we now have the necessary Government support to conclude this important transaction and to start making the financial commitments required to deliver an outstanding customer experience and to enhance the telecommunications infrastructure and economic development of the communities we serve”.
Pursuant to Section 20 (5) of the Fair Competition Act CAP 326C, the FTC said it had considered the overall efficiencies of the merger and the anti-competitive effects which it would create in the landline telephony and broadband Internet services.
It therefore determined that the merger should be approved subject to a number of conditions which emphasize the interests of telecommunications customers who are in line to receive a number of benefits, including lower prices on some services and the ability to keep their phone numbers if they switch from one company to another.
Conditions set by the FTC also include the implementation of a number of structural changes and the divestment of a number of their assets to an unrelated buyer.
With the approval, the merged entity is preparing to make a US$1.5 billion investment in the countries in which it now operates.
However, Bentley acknowledged, “In a small number of markets where we have yet to receive all the necessary approvals required, we cannot commence our integration and investment plans.
“We will therefore continue to support the local regulatory due process until we have the green light to move forward in those markets,” he added.