A Rough Start to SingTel's Aussie Adventure

Investors are so far trashing its move to buy Cable & Wireless Optus, meant to give the Singaporean telecom a long-sought foreign expansion

Lee Hsien Yang, CEO of Singapore Telecommunications Ltd., could have been forgiven for his visible smugness during a videoconference from Sydney on Mar. 26. The deal he was gloating over, the purchase of a 20% stake in Australian cellular operator Cable & Wireless Optus from its British parent Cable & Wireless PLC, was historic by regional standards simply because of its size. SingTel hopes that the purchase will be the first step in a full-scale takeover of Optus, which SingTel values at $8.2 billion. If so, it will mark the end of an arduous, accident-prone search for an acquisition that had the potential to set the Singapore government-linked company on a regional expansion path.

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