News: TLS UPDATE 1-Telstra to buy Digicel Pacific in Australia government-backed $1.6 bln deal

(Adds details of deal, background on China)

Oct 25 (Reuters) - Telstra Corp Ltd (TLS) said on Monday it agreed to buy the Pacific operations of telecom firm Digicel Group in a $1.6 billion deal largely funded by the Australian government and seen as a way to block China's rising influence in the region.

The government will front $1.33 billion of the total value, with Telstra contributing the rest, the Australian telco and a government statement said.

With China building its influence in the region, and months of market and media speculation surrounding Digicel's future, Telstra said https://www.reuters.com/business/telstra-australian-govt-finalising-bid-digicels-pacific-assets-sources-2021-10-14 the Australian government approached it to help it buy the business.

A sale of Digicel to a Chinese company would be a cause of concern for the Australian.

"The acquisition also reflects the Government's commitment, as part of its Pacific Step Up, to support the development of secure and reliable infrastructure in the region, which is critical to the Pacific region's economic growth and development," a joint statement by several government ministers said.

Telstra will fully own and operate the Digicel business, it said, adding that an additional $250 million could be added to the deal total depending on the performance of the business in the next three years.

It will take up to six months to complete, the company added.