Formosa Plastics buys Taiwan Cable Network

Formosa Plastics Group has agreed to acquire a medium-size cable-television network in Taiwan from Swedish private-equity fund EQT Partners, in what will be the latest exit of foreign investors from an increasingly crowded domestic TV market.

Formosa Plastics, one of Taiwan’s largest conglomerates with businesses ranging from petrochemicals to semiconductors to health care, said it plans to buy the entire 95 per cent stake in Gala Television Corp. held by EQT Partners for an undisclosed sum.

As Taiwan TV shifts to digital broadcast from analogue, the number of local channels has jumped at least threefold in recent years to 164, according to the National Communications Commission. Fierce competition has pushed down subscription fees, squeezing profit margins for channel and cable operators. But Taiwan’s pay-TV penetration rate remains one of the highest in Asia and the industry’s strong and steady cash flows are attractive to some investors.

EQT Partners acquired Gala TV with the network’s chief executive, Lin Poa-chuan, as a co-investor, in February 2011 from MBK Partners. EQT Partners and MBK did not unveil the value of the deal.

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