China Mobile Communications Corp says it will buy 88 per cent of small Pakistani mobile operator Paktel for US$284 million, its first overseas acquisition after two failed attempts.
Paktel, a unit of Nasdaq-listed Millicom International, has an enterprise value of US$460 million. It is the smallest GSM (global system for mobile communications) network operator in Pakistan.
'It would be the natural choice for China Mobile to invest in Pakistan, in view of the good diplomatic relations between China and Pakistan,' a local analyst said.
That cash transaction is expected to be completed late next month after complying with certain regulatory approvals and procedures.
It would also culminate a lengthy courtship between China Mobile and Millicom, a Nasdaq and Stockholm-listed investor in telecommunications businesses across emerging markets, which almost led the mainland firm to acquire the whole of Millicom for US$5.3 billion last year. That deal fell apart in July after the two companies failed to agree to terms.
Duncan Clark, managing director at telecommunications and technology consultancy BDA China in Beijing, said China Mobile's Paktel purchase showed how strategic a market Pakistan represents. 'That was the Millicom asset it was most interested in, and the country has one of the highest cellular penetration growth rates in its region,' Mr Clark said.