The Australian government has backed telecoms group Telstra’s $1.6bn acquisition of the Pacific businesses of Digicel Group in a move analysts said was designed to head off Chinese influence in the region.
Telstra said it was initially approached by Canberra to provide technical advice in relation to Digicel Pacific, part of the group founded by Irish billionaire Denis O’Brien that operates in Papua New Guinea, Fiji, Nauru, Samoa, Tonga and Vanuatu.
The government will contribute $1.3bn to finance the deal through a combination of loans and securities, with Telstra paying the rest, the company said in a filing to the Australian Stock Exchange.
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