Digicel Group Holdings Limited has entered into an agreement to sell Digicel Pacific Limited, its wholly owned subsidiary, to a subsidiary of the Australian telecommunications company Telstra Corporation Limited.

The company said that DPL has been valued at up to US$1.85 billion, inclusive of a three-year, $ 250 million earn-out and subject to customary post-closing adjustments. The transaction, which remains subject to customary government and regulatory approvals, is expected to be completed in the first quarter of 2022.

DPL operates in six markets in the South Pacific including Papua New Guinea, Fiji, Samoa, Vanuatu, Tonga and Nauru. It recorded sales of approximately $450 million and adjusted earnings before interest, tax, depreciation and amortisation of approximately $222 million in the year ended March 31.

Following the agreement, Digicel will have no operational responsibility for the Pacific operations although transition services will be provided by DGHL for a short period. There will be no change to the Digicel brand in the six markets and the current DPL management team will remain with and continue to lead the business in the South Pacific.

Denis O’Brien, Digicel founder and chairman, will join the board of directors of the newly formed holding company for DPL.

Mr O’Brien said: “Today’s announcement is a tremendous testament to our colleagues across Digicel Group and in particular, our 1,700 staff in the Pacific. In 2006, we established a business in the South Pacific region that has helped democratise mobile communications and transform local economies and societies by making affordable best-in-class communications available to more than ten million people across six of the most exciting markets in the South Pacific region.

“Today’s agreement with Telstra, our very near neighbour in the Pacific, will further enhance DPL’s infrastructure, data and call-termination links with one of the largest and most reliable networks in Australia.”