CCP approves Engro’s $563m acquisition of Jazz’s tower subsidiary

March 28, 2025 (MLN): The Competition Commission of Pakistan (CCP) has given its approval for Engro Corporation to acquire Deodar (Pvt.) Ltd., the tower subsidiary of Pakistan Mobile Communications Limited (Jazz), in a deal worth around $563 million.

The transaction is set to transform the telecom infrastructure sector, enabling Jazz to adopt an asset-light business model while enhancing Engro’s foothold in the telecom industry.

Jazz, a subsidiary of Veon, has been seeking to divest its tower assets, having previously explored deals with Edotco and the TPL-TASC consortium, according to the press release.

Rising energy costs, declining profit margins, and a growing preference for a service-oriented model have made it increasingly challenging for mobile operators to manage telecom tower infrastructure efficiently.

Through this acquisition, Engro Enfrashare, a subsidiary of Engro Connect, will assume control of Deodar’s 10,500 towers, significantly enhancing its current portfolio of 4,250 towers.

This expansion will establish Engro as the largest independent telecom infrastructure provider in Pakistan, with a market share surpassing 53% post-transaction.

The company intends to improve tower sharing among various network operators, promoting cost optimization and improved service delivery.

The transaction entails the transfer of Deodar’s $375m debt liability to Engro, along with an additional capital investment of $187.7m.

Engro aims to fund the acquisition through a combination of 67% debt and 33% equity, utilizing its robust cash reserves and financing capabilities.

Unlike Jazz’s earlier unsuccessful efforts to sell its tower assets, this deal is expected to proceed without regulatory hurdles.

The State Bank of Pakistan (SBP) and the Federal Board of Revenue (FBR) are unlikely to impose significant restrictions, as the transaction mainly involves debt restructuring rather than direct capital outflows.

With the CCP’s approval of the Scheme of Arrangement between the three entities, Engro Connect will formally acquire Deodar (Pvt.) Ltd. from PMCL, further strengthening its presence in the telecom infrastructure sector.

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