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Norway’s Telenor as announced that it will sell 100% of its Pakistan unit to Pakistan Telecommunications Company (PTCL) in a deal worth 5.3 billion Norwegian crowns ($490 million)
Telenor Pakistan was launched 18 years ago and has around 45 million customers, which will now be taken over by PTCL, itself owned by UAE-based operator group e&.
PTCL is the parent company of Telenor Pakistan’s local rival Ufone, which has 25 million subscribers.
Once combined, PTCL will have around 70 million subscribers – near parity with Pakistan’s largest mobile operator, Jazz.
Telenor began a strategic review of its Pakistani operations 18 months ago as part of a wider restructuring of its Asian businesses..
“Our strategy in Asia is to build number one positions in the markets we operate, with scale as a pre-requisite for value creation and profitable growth,” said Petter-Børre Furberg, head of Telenor Asia.
This strategic shift would see Telenor at the centre of a flurry of M&A activity over the past two years. Back in March, Telenor Asia, an autonomous entity which manages the group’s Asian operations, completed a merger between its True Corp and its Thai arm DTAC, which were the country’s second and third largest operator, respectively. The transaction was worth $20.7 billion and became the largest telco merger in South-East Asia.
Telenor also merged with Axiata’s Celcom to form CelcomDigi in Malaysia, becoming the top player in the country’s market.
For Telenor’s Pakistan unit, the bells have been tolling for some time. Late last year, Telenor announced it was seeking bids of around $1 billion for the unit. By October, a deal had still not materialised, though Telenor said discussions with various parties were underway and the company still hoped to sell before the end of the year.
Speaking to Reuters this week, Telenor’s CEO Sigve Brekke suggested that a merger had also been a potential option for the unit.
“We also tried to do a merger in Pakistan but we didn’t manage to get that,” he said. “And when we saw this wasn’t happening the second-best alternative was to arrange a sale”.
“It was a combination of not getting the structure in place, and value. So, we found a sale was better for our shareholders,” he explained.
The deal is subject to standard regulatory approval and is set to close next year.
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