Singapore Telecommunications (Singtel) is taking advantage of the rapid growth among emerging markets by acquiring a stake in Thailand’s Intouch Holdings. The move is expected to boost Singtel’s holding in India’s Bharti Telecom (BTL).
Singtel Group’s chief executive officer, Chua Sock Koong conveyed the plans and goals of their company which includes taking advantage of both Thailand and India’s young population demographics to boost the telecom business. She said, “These two transactions…allow us to increase our economic interest in two companies, Advanced Info Service (AIS) and Bharti Airtel, and to operate in two countries where we think there will be a lot more economic growth.”
According in an official statement, Singtel intends to acquire a 21% stake in Intouch Holdings for approximately $1.18 billion. Meanwhile, it plans to acquire a corresponding 7.39% stake in BTL for an estimated $650 million.
This planned acquisition is the latest in a lineup of Singtel’s strategic methods to expand their company. Singtel already has a 39.7% stake in BTL and is buying shares from Temasek. Intouch has a 40.45% and 41.4% stake in Advanced Info Service and Thaicom respectively. Meanwhile, BTL is the holding company of Bharti Airtel. These connections are what Singtel wants to exploit.
In an official statement Singtel commented, “Intouch and BTL own assets that are leaders in their respective markets, with strong track records of earnings growth. These investments position both companies well to compete and capture the growth in mobile internet services.”
Singtel plans to raise the funds from the impending acquisition through a mix of cash, debt, and shares issued to Temasek.
Philip Chen Chong Tan, CEO of Intouch said in a follow-up statement that while Singtel already laid out plans, they haven’t received formal information with regards to the deal.