October 21, 2003 — (WEB HOST INDUSTRY REVIEW) — FLAG Telecom Group Limited (flagtelecom.com), a provider of network transport and telecommunications services, announced late last week that it has entered into an agreement to merge with Reliance Gateway Net Private Limited, a subsidiary of Reliance Infocomm Limited, the telecommunications arm of the Reliance Group (ril.com), India?s largest business consortium.
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Under the terms of the agreement, Reliance Gateway will acquire 100 percent of FLAG Telecom’s shares for an aggregate purchase price of $207 million, reflecting a per share price of $95.61.
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The agreement has been approved by both company boards and is subject to standard regulatory approvals.
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FLAG Telecom’s shareholders will meet in December to approve the agreement, the company said.
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“We believe this premium offer by Reliance to acquire FLAG represents a strong endorsement of FLAG’s operating strategy and is in the best interests of our shareholders,” said Patrick Gallagher, co-chairman and CEO of FLAG Telecom. “Reliance is already a key customer on the FLAG global network, one of the most extensive in the world today. We believe that this agreement with Reliance underscores the confidence they have in the future of FLAG and we look forward to the successful consummation of the transaction.”
