S. Korea's Hanaro, Thrunet end merger talks


South Korea has more than 8 million broadband users

Staff and wires

SEOUL, South Korea -- South Korea's second and third largest high-speed Internet providers, Hanaro Telecom and Thrunet, have ended their merger talks.

Hanaro said Sunday it decided to end the negotiations after Thrunet was found to have signed a preliminary agreement with mobile phone company SK Telecom to sell off its leased service line operations.

Hanaro and Thrunet have been talking about a merger since last November, as a way of competing with Korean broadband leader KT Corp.

KT has about 49 percent of South Korea's 8 million-plus broadband users, followed by Hanaro with 27 percent and Thrunet with 17 percent.

No longer among assets

But Hanaro saw Thrunet's "secret" agreement with SK Telecom last week as a dealbreaker, according to the Digital Chosun site. SK Telecom signed a preliminary deal last Monday to buy Thrunet's leasing service division.

In a statement released to the Korea Stock Exchange, Hanaro said it was meaningless to continue talks when Thrunet's key leasing operation was no longer among the assets available for a merger and acquisition, Yonhap news agency reported.

Thrunet said it was disappointed at Hanaro's decision.

Shares in Hanaro were down 12 percent at 6560 won Monday on the Kosdaq. SK Telecom was down 3.62 percent to 279,500 won on the main Seoul market.