Cash-rich Singapore Telecommunications has agreed to buy Australia's second largest telecom operator Cable & Wireless Optus.
It values the company at AU$17 billion in what is the largest foreign acquisition ever by a Singapore company.
Optus is 52.5 percent owned by Cable & Wireless. The remainder is publicly held.
Details of the buyout, involving three listed companies in different time-zones, were being ironed out over the weekend and would be released before the stockmarket opens in Sydney on Monday, sources familiar with the deal told Reuters.
Vodafone, the world's largest mobile phone company, and which had also been trying to buy Optus, said it was pulling out of the auction. A SingTel spokesman declined comment, as did the other bidder for Optus - Telecom NZ.
The deal, which follows a long and arduous battle, is not expected to face opposition from Australian regulatory authorities, sources close to the deal in Australia said.
An official from the powerful Australian Competition and Consumer Commission told Reuters on Friday that the anti-monopolies watchdog's mergers panel was meeting on Tuesday and a full commission meeting was scheduled for Thursday.
The Optus acquisition comes a year after SingTel tried but failed to buy another C&W asset - HongKong Telecom, which has since been taken over by Pacific Century CyberWorks.
SingTel is Asia's eighth largest telecom company with a market value of more than US$20 billion. "If an announcement is to be made, we will inform the market," SingTel director of corporate communications Ivan Tan said on Sunday.
Broker sources said the contest had really been whittled down to Vodafone and SingTel, both of which had greater financial resources than the New Zealand telco.
Vodafone's pull-out comes ahead of its original plans to submit a revised bid for Optus later in the week to Australia's anti-monopolies watchdog.
Vodafone said in its Sunday statement that it wanted to grow a profitable business in Australia but the proposed Optus deal "did not meet" its return criteria.
Vodafone was interested only in Optus' mobile operations and it had been lobbying the Australian Competition and Consumer Commission to break up Optus instead of allowing it to remain as a full-service carrier. SingTel's success would mean Optus would remain an integrated carrier.
"Australian consumers will be best served by Optus remaining an integrated telco, offering competitively priced bundled services," SingTel had said earlier.
The Optus stake would also give SingTel, which has been pursuing an aggressive overseas expansion, 33 percent of Australia's mobile market.
Optus recorded a net attributable profit of AU$264.5 million for year ended March 31, 2000 after a loss of AU$9.6 mln for the same period in 1999. The 2000 result was at the low end of market expectations.
