Irish telecoms company says it is closing its doors amid concerns over merger

Jun 22, 2021 Corporate

The Irish telecommunications company Irish Telecom is closing all its offices in the United States and the United Kingdom, as the company looks to scale back its operations in the wake of a takeover by SoftBank.

The announcement came after SoftBank’s proposed $5.6 billion takeover of Ireland’s biggest telecommunications company, TD, sparked a global scramble for overseas assets and sparked fears that the combined company could become too big to fail.

TD has about 1,000 employees, including employees of its Irish subsidiary.TD’s Irish operations, however, include nearly a quarter of the country’s mobile network and nearly a third of the carrier’s revenue.

SoftBank acquired TD from TD last year for about $1.5 billion.

The deal would have combined the companies main Irish operations with SoftBank and would have put more than 300,000 Irish workers in the hands of SoftBank, including a number of its top executives.

SoftBank is seeking to acquire the United Arab Emirates-based TD for about 50 percent of its value, with a valuation of about $8.8 billion.

TD will be shuttered by the end of the year and would be sold to SoftBank under an alternative financing arrangement.

“It’s an exciting time to be in the telecommunications business,” said TD’s chief executive, Brendan O’Connell.

“But, given the current situation, it’s necessary for us to consider the potential impact of Softbank’s takeover on our operations and the operations of our employees.”

SoftBank has previously said it was looking to expand its business, including the possibility of a merger with the Japanese telecommunications company SoftBank Group, or SoftBank TBS, which has been valued at $16.5 trillion.

The U.S. Federal Communications Commission has said that SoftBank may have to give up some of its US-based assets to avoid violating antitrust laws.

In the United Nations, SoftBank is also expected to make a public statement on Tuesday in response to U.N. President Antonio Guterres request for a statement on the proposed merger.

The proposed deal was rejected by the U.K. Government, which warned that Softbank could “undermine the integrity of the UK’s telecoms sector”.

In an article published by Bloomberg on Monday, Softbank said that the merger would allow the company to “implement a new model and structure to enhance the business and services offered by TD”.

The deal would mean a merger between SoftBank Capital and TD, with Softbank holding about a quarter.

Softbank Capital will own a stake of about 80 percent in TD, which currently has about 40 percent of the company.

The proposed deal would see SoftBank acquiring a 40 percent stake in TD and then transferring that ownership to Softbank.

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