UPDATE 2-S.Korea SK Telecom buys $1.2 bln hanaro stake

(Adds detail, analyst comment, background)

By Marie-France Han and Kim Soyoung

SEOUL, Dec 3 (Reuters) - SK Telecom (017670.KS: Quote, Profile, Research, Stock Buzz) agreed to buy nearly 40 percent of broadband firm hanarotelecom for $1.2 billion as South Korea's top mobile phone operator attempts to diversify its offerings at home and expand abroad.

The purchase from a consortium led by insurer American International Group (AIG.N: Quote, Profile, Research, Stock Buzz) and private equity fund Newbridge Capital [NB.UL] comes after Sprint Nextel (S.N: Quote, Profile, Research, Stock Buzz) last week rejected a $5 billion investment by a group including SK, which is also looking to get a foothold in the United States.

SK already held 4.7 percent of hanarotelecom before the deal announced on Monday, making it the broadband operator's top investor with 43.6 percent.

The 1.09 trillion won ($1.18 billion) for 38.9 percent of hanarotelecom (033630.KQ: Quote, Profile, Research, Stock Buzz) values Korea's No. 2 broadband provider at 11,900 won a share, just below Friday's closing price, but a solid 46 percent higher than before market talk of SK interest surfaced in early November.

Shares in SK Telecom up 1 percent, while hanarotelecom closed down 6.6 percent in a slightly weaker wider market .

Analysts said the deal was positive for SK Telecom, closing at the low end of market speculation of a deal between 12,000 and 14,000 won. Investors had seen SK as a good strategic buyer for hanarotelecom, which has a quarter of Korea's broadband market.

Adding broadband to its business portfolio would enable SK Telecom to package offerings of broadband, telephone and mobile services, and trim costs.