Myanmar First Mover TPG Seeks to Create $700 Million Tower Giant

(Bloomberg) -- TPG, the first major U.S. private equity firm to invest in Myanmar after it emerged from military rule, is working on another landmark transaction in what’s become one of the world’s fastest-growing economies.

It’s pursuing a deal to create Myanmar’s biggest independent owner of telecom towers as mobile-phone usage in the country soars, people with knowledge of the matter said. TPG-backed Apollo Towers Myanmar Ltd. is seeking to merge with rival Pan Asia Majestic Eagle Ltd., according to the people, who asked not to be identified because the information is private.

TPG plans to become the majority shareholder of any combined entity, which would have more than 3,000 towers and an enterprise value of at least $700 million, the people said. The New York-based firm teamed up with former LightSquared Inc. Chief Executive Officer Sanjiv Ahuja to form Apollo Towers in 2014, with its growth-equity unit investing about $40 million, Bloomberg News reported at the time.

The New York-based firm was an early mover in Myanmar, following up the Apollo Towers transaction with a 2015 deal to buy 50 percent of Myanmar Distillery Co., maker of the country’s leading whisky brand. TPG sold the business last year to billionaire Charoen Sirivadhanabhakdi’s Thai Beverage Pcl, roughly tripling the value of its investment in one of the country’s first significant private-equity exits, Bloomberg News reported at the time.

Foreign Investment

Since TPG’s initial investment in Apollo Towers, the airwaves have been opened to foreign investors, and now almost everyone in the Southeast Asian country has a phone with internet service. A combination of Apollo Towers and Pan Asia would become the country’s biggest independent owner of wireless infrastructure, with more towers than Irrawaddy Green Towers Ltd., the people said.

Any merger would add to the $78.6 billion in private-equity deals announced this year that involve Asian targets, data compiled by Bloomberg show. There’s no certainty the deliberations will lead to a transaction, and any deal would need regulatory approval, according to the people.

TPG declined to comment in an emailed statement. A person who answered the phone at Apollo Towers’s office said nobody was immediately available to comment. An official at Pan Asia didn’t immediately answer a phone call and messages seeking comment.

Myanmar Investments International Ltd., which trades on London’s AIM venue for small-cap listings, is also an investor in Apollo Towers, according to its website.

Better Coverage

Frost & Sullivan Inc. said last year it expects consolidation in the growing Myanmar tower market, which needs to add as many as 8,000 new sites to provide full coverage. About 77 percent of people in Myanmar had wireless service last year, up from 1.1 percent in 2010, according to United Nations data.

Telenor ASA and Qatar’s Ooredoo QPSC have entered the nation’s wireless market since it was opened to foreign competition, while Japanese carrier KDDI Corp. and trading house Sumitomo Corp. have teamed up with government-owned Myanma Posts & Telecommunications. Viettel Group, the state-backed carrier run by Vietnam’s Ministry of Defense, became Myanmar’s fourth mobile phone operator in 2016.

Edotco Group Sdn., controlled by Malaysia’s biggest wireless carrier, has said it expects to increase the number of its towers in Myanmar to 5,000 by around 2023.

TPG is on the lookout for more deals in the banking, telecom, infrastructure and consumer sectors, an adviser to the private-equity firm said in a 2016 interview. TPG co-founder David Bonderman traveled to Myanmar in 2012 and met with government officials, business executives and democracy advocate Aung San Suu Kyi to size up the investment and political climate.

--With assistance from Kyaw Thu.

To contact the reporter on this story: Joyce Koh in Singapore at jkoh38@bloomberg.net

To contact the editors responsible for this story: Ben Scent at bscent@bloomberg.net, ;Sunil Jagtiani at sjagtiani@bloomberg.net, Colin Keatinge

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