ST Engineering snaps up 51% stake in SPTel

It is strengthening its capability in the ICT segment.

Singapore Technologies Engineering announced that its electronics arm is acquiring 51% equity stake in SP Telecommunications (SPTel) from Singapore Power for $54m, which will be subject to a maximum of $60m.

According to OCBC, the transaction will be fully funded by ST Electronics’ internal cash and is expected to close by 2Q17.

SPTel owns, builds and operates communication and infrastructure services in Singapore, and it also owns an extensive network of fibre optic back-haul infrastructure and facilities.

"In our view, this proposed acquisition will strengthen ST Electronics capabilities in Info-Communications Technology (ICT) segment, which is in-line with its strategy to drive growth ahead in this area. We believe this acquisition of ICT-related infrastructure allows ST Electronics to be better poised to provide ICT solutions for enterprise customers and is also in-line with Singapore’s vision to become a smart nation," the firm said.

However, OCBC said this would not have any material impact on the group in the near-term.