ZTE Burnishes Regional Portfolio With $101M Netaş Stake
ZTE has taken a controlling stake in one of Turkey's largest IT firms in a bid to strengthen its offerings in central and west Asia.
The state-owned Chinese vendor has acquired 48.04% of publicly listed Netaş Telekomünikasyon for $101.28 million, the company announced Tuesday.
JPMorgan Chase PE firm One Equity Partners has held that stake since acquiring it from Nortel in 2010.
Netaş, Turkey's biggest systems integrator, last year made $371 million in revenues from carrier, government and enterprise customers. It has grown 400% in the last six years.
It will continue to trade independently, ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763) said.
The investment broadens ZTE's enterprise portfolio and improves its ability to win contracts in Turkey and neighboring economies. These will form the primary focus for the company, a spokesman said.
The biggest driver behind the deal looks to be China's "One Belt-One Road" project. Despite the baffling name, the scheme is one of China's biggest offshore economic and strategic schemes, aimed at bringing central Asia, southeast Asia and the Middle East closer to China through massive investment in new infrastructure.
Details are unclear, but Chinese government and financial agencies are prepared to spend billions on new roads, bridges, ports, networks and other items.
ZTE's enterprise division last year sold 10.2 billion yuan ($1.48 billion) in solutions, accounting for just over 10% of total sales.
— Robert Clark, contributing editor, special to Light Reading