The Competition Commission of Pakistan (CCP) has approved Engro Corporation’s acquisition of Deodar (Pvt.) Ltd., the tower subsidiary of Pakistan Mobile Communications Limited (Jazz), in a transaction valued at approximately $563 million. The deal is expected to reshape the telecom infrastructure landscape, allowing Jazz to shift towards an asset-light business model while strengthening Engro’s position in the telecom sector.
Jazz, owned by Veon, has long sought to divest its tower infrastructure, previously attempting deals with Edotco and the TPL-TASC consortium. Rising energy costs, shrinking profit margins, and the shift towards a service-centric model have made telecom tower management increasingly unviable for mobile operators.
Engro Enfrashare, a subsidiary of Engro Connect, will take over Deodar’s 10,500 towers, significantly expanding its existing portfolio of 4,250 towers. This move aims to solidify Engro’s position as the largest independent telecom infrastructure provider in Pakistan, with a post-transaction market share exceeding 53%. The company aims to optimise tower sharing among multiple network operators, enhancing cost efficiency and service quality.
The transaction structure includes the transfer of Deodar’s $375 million debt liability to Engro, with an additional $187.7 million in fresh capital investment. Engro plans to finance the deal through a mix of 67% debt and 33% equity, leveraging its strong cash reserves and financing arrangements.
Unlike Jazz’s previous failed tower sales, regulatory hurdles are not expected to impede this deal. The State Bank of Pakistan (SBP) and the Federal Board of Revenue (FBR) are unlikely to impose significant restrictions, as most of the transaction involves debt transfer rather than direct capital outflows.
With the Competition Commission of Pakistan (CCP) approving the Scheme of Arrangement between the three companies, Engro Connect will acquire control of Deodar (Private) Limited from PMCL, according to the CCP.
