State-owned telco firm Telekomunikasi Indonesia is looking to acquire minority shares in three firms from neighboring Malaysia – one of which is Singapore-listed – according to sources of local media Kontan. The telco company is reportedly preparing $369 million (IDR 5 trillion) for the potential deals.
“The deal is expected to close by the end of this year,” the source said, as quoted by Kontan, adding that the move is part of Telkom’s expansion strategy through M&As.
The total market capitalizations of the three target companies is known to be around IDR 10 trillion ($739 million).
Telkom is also aiming to expand its tower business through unit Dayamitra Telekomunikasi (Mitratel) by merging it with Telekomunikasi Seluler (Telkomsel), another subsidiary. The merger is also expected to be completed by year-end.
Telkom director Harry M Zen said in August that the company was reviewing 10 potential M&As involving fintech, e-commerce, and ICT startups. The company allocates approximately $2 billion for capital expenditure this year.
“We are currently reviewing our business expansion plans for the future. What we can do, we’ll do it ourselves. What we can’t do, we’ll acquire,” he had told reporters in Jakarta then.
Telkom raked in $8.7 billion in revenues last year. The publicly-listed company has repeatedly said that it wants to boost expansion, particularly in the digital space, whether through collaboration or acquisition. It set up a VC firm, MDI Ventures, in 2014 to make this vision a reality.
It has committed $100 million for the VC to invest into global and domestic startups within the span of four years. MDI Ventures’ most recent investment was a pre-Series A round that it led in June into Kofera, a marketing SaaS firm.