Malaysia's Axiata to buy Pakistan telecom towers firm for $940 million
Malaysian telecommunications firm Axiata Group`s infrastructure unit is buying telecom towers in Pakistan for $940 million in partnership with a local conglomerate, in what will be one of the biggest deals in the South Asian nation.
Axiata subsidiary edotco Group Sdn Bhd and its Pakistani partner Dawood Hercules Corp will acquire Deodar, the tower unit of Pakistan Mobile Communications Ltd, which will add more than 13,000 towers to its portfolio.
The purchase will see edotco emerge as the world`s eighth-largest independent tower firm and the second-largest multi-country tower operator, with a portfolio of about 40,000 towers across six countries.
Tower firms in Asia have been expanding by buying tower infrastructure from carriers, who, in many cases, are aiming to cut debt and focus on their core business.
"The acquisition of Deodar is a critical part of our growth strategy and ambition to position edotco as the leading independent telecommunications infrastructure services provider in Asia," edotco CEO Suresh Sidhu said in a statement on Wednesday.
Sidhu told a media conference later that the acquisition, edotco`s biggest, is part of its strategy to focus on assets in South and Southeast Asia, according to the recording of the conference reviewed by Reuters.
The deal, expected to be completed in the fourth quarter, would rank as one of Pakistan`s five biggest deals, according to Thomson Reuters data.
Edotco has previously said it aimed to become Pakistan`s largest independent tower firm. In June, it bought Pakistan`s Tanzanite Tower Pte Ltd for $90 million in a deal involving about 700 towers.
Axiata owns 62.4 percent of edotco, which in recent months raised $700 million from Malaysia`s $28 billion Retirement Fund Incorporated (KWAP), sovereign wealth fund Khazanah and Innovation Network Corp of Japan.
The acquisition of the Deodar towers unit will be funded using $600 million raised via debt and the remainder via equity and is expected to immediately add to Axiata`s earnings, according to the statement.
It was not immediately clear how the total acquisition cost is being split between the two partners.
As part of the deal, though, Dawood Hercules will buy 45 percent of edotco Pakistan (Pvt) Ltd. Inam ur Rahman, CEO of Dawood Hercules, said the partnership strengthens the conglomerate`s long term commitment to technology infrastructure development in Pakistan.
Pakistan Mobile Communications is also known by its brand name Jazz. Amsterdam-based Veon Ltd, which owns Jazz, said in a separate statement that the sale of Deodar will add to its earnings.
Delta Partners Corporate Finance Ltd and Deutsche Bank are advising edotco on the acquisition.
Axiata, Malaysia`s largest mobile operator by market value, also reported an 83 percent jump in quarterly profit. Shares of the company rose 1.7 percent on the national stock exchange on Wednesday.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.