Telstra held talks with private equity firm about international merger

Telstra held advanced talks with a private equity firm to combine its international division with Hong-Kong based operator PCCW Global, in a clear sign of the $41 billion telco giant’s plans to grow its business outside of Australia.

Industry sources familiar with the talks, who spoke on the condition of anonymity because they were confidential, said Telstra was in talks for months with private equity firm I Squared Capital on a potential deal that would have seen it combine its international arm with Hong Kong-based PCCW Global.

Under the plans, Telstra and I Squared Capital would have jointly lobbed a bid for PCCW Global and worked together on company expansion. Telstra International was separately looking at buying PCCW Global, a unit of Hong Kong Telecom, before the talks with private equity began. The sources said the talks advanced to the PCCW Global dataroom, but no formal bid was made.

I Squared Capital hired former Telstra executive and consultant Martijn Blanken to represent it during the process, they said. Mr Blanken, who left his role as executive director of global sales, international, at Telstra in 2018, declined to comment. A spokesperson from Telstra said it does not comment on speculation related to mergers and acquisitions.