Macquarie, MBK Partners seal $2 billion South Korea deal

SEOUL (Reuters) - An investment fund managed by Australia's Macquarie Group MQG.AX and private equity house MBK Partners have completed a $2 billion joint acquisition of South Korea's No. 2 cable TV operator C&M Co Ltd, both companies said.

The deal made the unlisted company the first Korean cable TV operator owned by private equity funds, which have been attracted by the sector’s strong growth prospects, steady cashflow and local market monopolies.

The country’s adoption of digital and broadband TV services raise hopes for further revenue growth.

A consortium led by MBK Partners and Macquarie Korea Opportunities Fund (MKOF) sealed the transaction for a 92.5 percent stake in C&M for a total of 2 trillion won ($2 billion), according to a joint statement issued late on Thursday.

The consortium, Kookmin Cable Investment Inc, had initially

bought 27.5 percent of C&M from Goldman Sachs GS.N for 563 billion won last year and latern on secured another 65 percent from C&M Chairman Lee Min-joo and other major stakeholders.

Top South Korean fund manager Mirae Asset Management and Taihan Electric Wire 001440.KS were among the investors for the purchase, but no breakdown of their ownership was provided.

The deal had been in the spotlight due to a debate over who would be the top managing entity of the cable TV multi-systems operator, in a country with restrictions on foreign investment in domestic broadcast companies.

The deal closure comes after the transaction received approval from the Korea Broadcasting Commission in late February.

C&M has more than two million cable TV subscribers and covers Seoul and the surrounding metropolitan area, giving it access to more than 40 percent of the South Korean population, according to the joint statement.

Analysts said the anticipated easing of existing regulations over cable TV operators' coverage areas would trigger consolidation among the country's 100-odd cable operators, including Qrix Communication 035210.KQ and On Media 045710.KS.

In 2007, Macquarie acquired a top South Korean top cinema chain, Megabox last year but lost out to SK Telecom Co 017670.KS in the bidding for a major stake in broadband operator hanarotelecom 033630.KQ.

MBK, set up by former Carlyle Group Asia head Michael Kim, is the most active homegrown fund in the country.

($1=987.2 Won)

Reporting by Kim Yeon-hee; Editing by Marie-France Han and Anshuman Daga