US private equity firm TPG is forging a deal which could result in it becoming Myanmar’s biggest independent owner of telecom towers, Bloomberg reported last week, quoting people close to the deal.

TPG-backed Apollo Towers Myanmar is reportedly seeking a majority stake in a merger with rival Pan Asia Majestic Eagle. If successful, the new entity will own more than 3,000 towers and have an enterprise value of at least $700 million, Bloomberg’s sources said.

The move comes at a time when mobile phone and Internet usage in Myanmar has risen substantially and still continues to increase as the economy grows. About 77 percent of people in Myanmar had wireless service last year, up from 1.1 pc in 2010, according to United Nations data.

To accommodate that level of growth, the Myanmar tower market will need to add as many as 8,000 new sites to provide full coverage, according to a Frost & Sullivan report last year.

Currently, the telecommunications sector is dominated by Norway’s Telenor ASA, Qatar’s Ooredoo and government-owned Myanma Posts & Telecommunications, which recently teamed up with Japanese carrier KDDI Corp. and trading house Sumitomo Corp to strengthen its service offering. Viettel Group, the state-backed carrier run by Vietnam’s Ministry of Defense, this year started operating as Myanmar’s fourth mobile phone service provider.

This won’t be the first Myanmar deal for TPG. The firm in 2015 bought a 50pc stake in Myanmar Distillery Co, which makes Grand Royal whisky for $150 million. Last year, it sold that stake to Singapore-listed Thai Beverage for $494.4 million, according to reports.

ThaiBev is the main spirits maker in Thailand, controlling more than 90pc of the market. Last year, Thaibev bought a controlling 53.59 pc stake in Sabeco, the Vietnamese beer maker.

The Thai company also brews the popular Chang beer. In 2013, it acquired Singapore’s beverage maker Fraser & Neave for $11.2 billion. F&N makes soft drinks, ready-to-drink teas and soya milk as well as the 100 Plus isotonic energy drink, which is distributed in Myanmar.

F&N this year also received Myanmar Investment Commission approval to manufacture and distribute beer in the country, three years after it sold its 55pcstake in Myanmar Brewery to Japan’s Kirin Holdings for $560 million.

By The Myanmar Times(Published: 24/05/2018)

https://www.mmtimes.com/news/us-private-equity-firm-exploring-telecom-tower-deal-myanmar.html

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