Acquisitions

Anwar’s High-Stakes Gamble: The RM11 Billion Sunway-IJM Takeover Testing Malaysia’s Economic Divide

Published

4 days ago

February 20, 2026

A blockbuster bid by billionaire Jeffrey Cheah’s Sunway Group to absorb construction giant IJM has ignited a ferocious debate about race, capital, and who really controls Malaysia’s economic future—just as the country edges toward a pivotal election cycle.

There are corporate deals, and then there are deals that hold up a mirror to an entire nation. The RM11 billion bid by Sunway Berhad for IJM Corporation is emphatically the latter. On the surface, it is a straightforward consolidation play in a sector long overdue for rationalisation. Dig a little deeper, and you find a collision of race politics, institutional shareholder power, and the ambitions of a prime minister still navigating the treacherous waters of multiracial governance.

When Sunway launched its takeover offer on January 12, 2026, valuing IJM at approximately RM11 billion—or around US$2.71 billion—the financial logic seemed sound. A combined entity would command a market capitalisation approaching RM50 billion, vaulting into the top ten on Bursa Malaysia and creating what proponents call a genuine national construction and property champion capable of competing regionally. But the weeks since have been anything but smooth, as bumiputera advocacy groups, opposition politicians, and state investment funds have raised uncomfortable questions about what this merger means for Malay economic ownership in a sector long considered strategically sensitive.

The Deal: What Is Actually on the Table

Sunway’s offer values each IJM share at roughly RM2.60, a premium of approximately 17 percent over IJM’s three-month volume-weighted average price prior to the announcement. IJM shareholders, many of whom have watched the stock languish for years amid rising input costs and a sluggish domestic construction pipeline, initially responded with cautious optimism. IJM’s share price surged past RM2.50 in the days following the announcement before settling into a holding pattern as political controversy deepened.

Sunway itself entered the year trading at a market capitalisation of roughly RM38 billion, buoyed by strong recurring income from its integrated townships and healthcare assets. The combined group would hold property, construction, infrastructure, and quarrying operations across Malaysia, India, the Middle East, and Australia—a conglomerate of genuine regional heft.

IJM also brings a balance sheet that makes the deal attractive beyond pure scale. With cash reserves exceeding RM2 billion and a healthy order book underpinned by ongoing infrastructure projects, it is not a distressed asset. That, paradoxically, has sharpened the controversy: critics ask why a profitable, bumiputera-linked institution should be absorbed into a group whose founder and controlling shareholder, Tan Sri Jeffrey Cheah, is an ethnic Chinese tycoon.

Jeffrey Cheah, Anwar Ibrahim, and the Racial Arithmetic

Few figures in Malaysian business carry the symbolic weight of Jeffrey Cheah. The founder of Sunway Group built his fortune from tin-mining wastelands in Selangor into one of the country’s most admired integrated townships, and has channelled hundreds of millions into education philanthropy through the Jeffrey Cheah Foundation. He is, by any measure, a Malaysian success story.

But success in Malaysia has always been read through a racial lens, and Cheah’s Chinese identity sits awkwardly against the backdrop of a deal that many bumiputera groups see as a dilution of Malay corporate ownership. IJM, while not a state-linked enterprise in the strictest sense, counts the Employees Provident Fund (EPF) and Permodalan Nasional Berhad (PNB)—two of the country’s largest state-backed institutional investors—among its most significant shareholders. Both funds carry an implicit mandate to protect and grow bumiputera wealth.

As reported by Bloomberg, the deal has drawn scrutiny precisely because it tests the limits of how far market logic can override the country’s affirmative ownership framework. PNB, which manages assets on behalf of bumiputera Malaysians, has not publicly declared its position. Its silence has been deafening.

For Prime Minister Anwar Ibrahim, the deal presents a political calculation of extraordinary delicacy. Anwar has staked much of his Madani economic agenda on attracting foreign investment, liberalising ownership rules, and projecting Malaysia as a modern, meritocratic economy. Approving a merger that creates a stronger, more competitive national champion aligns neatly with that narrative. But his political survival rests on a coalition that includes UMNO, whose grassroots remain deeply invested in the premise that bumiputera economic gains must be protected—sometimes at the expense of market efficiency.

UMNO Youth has been among the most vocal critics, with its leadership publicly questioning whether the government should allow what they characterise as a transfer of strategic assets from the bumiputera sphere to non-bumiputera control. The language has been incendiary in places, tapping into anxieties that predate the merger by decades but have found fresh urgency in an environment where Malay voter sentiment ahead of the 2026-2028 election cycle is increasingly volatile.

The Institutional Shareholders: EPF’s Quiet Power Play

Perhaps the most intriguing subplot involves the EPF. In the weeks following Sunway’s January announcement, market observers noted that the pension fund—which is the single largest institutional investor on Bursa Malaysia—had been quietly accumulating Sunway shares. As reported by The Edge Malaysia, EPF’s purchases were interpreted by some analysts as a signal that the fund was positioning itself to benefit from a deal it quietly endorses, while others read it as a hedge against the uncertainty a prolonged takeover battle creates.

The EPF’s dual role as a Sunway shareholder and an IJM shareholder creates an inherent tension. A higher offer price benefits its IJM position; a successful merger and subsequent re-rating of the combined entity would benefit its Sunway position. The fund’s leadership has maintained strict public silence, consistent with its fiduciary mandate, but the market is watching its every filing.

PNB presents a different profile. As the custodian of Amanah Saham Bumiputera (ASB) and related funds, it carries an explicitly race-conscious mandate that makes a straightforward commercial calculation more politically fraught. If PNB tenders its IJM shares to Sunway, it will face intense criticism from bumiputera advocacy groups regardless of the financial merit. If it withholds, it may be accused of undermining shareholder value for political reasons.

Regulatory Overhang: MACC and the Graft Question

Adding further turbulence, the Malaysian Anti-Corruption Commission (MACC) has been conducting investigations related to procurement irregularities in the construction sector—investigations that, while not directly targeted at either Sunway or IJM, have cast a shadow over the broader industry. Opposition politicians have not been slow to connect these investigations to the merger narrative, suggesting that a mega-consolidation could create opacity rather than accountability in public project awards.

These allegations remain unproven, and both Sunway and IJM have categorically denied any wrongdoing. But in the court of public opinion—particularly among Malay-majority voter blocs who are already sceptical of large Chinese-controlled conglomerates—the suggestion of graft, however tenuous, is politically potent.

The Financial Case: Why the Numbers Still Argue for Consolidation

Strip away the politics, and the economic logic for consolidation remains compelling.

Pre- and Post-Merger Snapshot (estimated, 2026):

Metric	Sunway (standalone)	IJM (standalone)	Combined Entity (projected)
Market Cap	~RM38 billion	~RM11 billion	~RM50 billion
Order Book	~RM8 billion	~RM12 billion	~RM20 billion
Cash Reserves	~RM3 billion	>RM2 billion	~RM5+ billion
Bursa Ranking	Top 20	Outside Top 20	Top 10
Regional Presence	MY, India, ME	MY, India, Australia	Significantly expanded

Malaysia’s construction sector has been fragmented for too long. Dozens of mid-tier contractors compete for the same government contracts, undercutting margins and limiting investment in technology and sustainability. A combined Sunway-IJM entity would have the balance sheet to pursue large-scale infrastructure projects—including potential MRT extensions, Johor-Singapore Rapid Transit System works, and data centre construction—at a scale that smaller competitors cannot match.

As Reuters reported when the bid was announced, the merger is explicitly intended to create a “Malaysian building champion” capable of competing with regional giants from South Korea, Japan, and China that have long dominated Southeast Asian infrastructure. The argument is not merely financial; it is strategic.

Stakeholder Perspectives: A Divided Chorus

Institutional investors broadly favour the deal, citing synergy potential and the premium on offer. Foreign portfolio investors, in particular, have welcomed any signal that Malaysia is willing to allow market-driven consolidation over politically motivated intervention.

Bumiputera advocacy groups remain opposed, framing the merger as a symbolic retreat from the New Economic Policy’s goals of redistributive ownership. Their concern is less about Sunway’s competence than about the precedent: if EPF and PNB are seen to facilitate a transfer of a bumiputera-associated asset to a Chinese-controlled group, it emboldens similar deals in other sectors.

Industry executives, speaking privately, tend to regard the political opposition as short-sighted. One senior figure in the construction supply chain, speaking on condition of anonymity, described the fragmentation of the sector as “a luxury we can no longer afford” given the scale of infrastructure investment required to sustain Malaysia’s economic development targets.

Opposition politicians, from both the right and left flanks, have found unlikely common cause in scrutinising the deal—though for very different reasons. Perikatan Nasional has leaned into the bumiputera ownership argument; Parti Sosialis Malaysia has questioned the concentration of market power.

The Political Clock: 2026 and Beyond

The offer closes on April 6, 2026. That date matters enormously. Malaysia’s next general election is constitutionally due by 2028, but the political calendar is fluid; state elections and the underlying fragility of Anwar’s coalition mean that every major policy decision carries electoral freight.

A government that approves or tacitly facilitates this merger risks alienating a segment of the Malay electorate that sees bumiputera corporate ownership as non-negotiable. A government that blocks or delays it risks signalling to international capital that Malaysia remains a prisoner of ethnic economic politics—precisely the image Anwar has worked to overcome since taking office.

As Channel News Asia noted in its coverage, the controversy has exposed a fault line in Malaysia’s economic governance that no amount of Madani branding fully papers over: the tension between a market-oriented economic vision and the redistributive commitments baked into the country’s political DNA.

Three Scenarios for What Comes Next

Scenario One: The Deal Proceeds, Largely Intact. EPF and PNB tender their shares, the offer closes on schedule in April, and the combined entity lists as one of Bursa’s largest companies. Politically, Anwar absorbs short-term criticism from UMNO backbenchers but points to the resulting national champion as evidence of his economic competence. Markets respond positively.

Scenario Two: A Revised Offer with Bumiputera Conditions. Under pressure from state funds and the government, Sunway sweetens the deal—either by raising the offer price or by committing to structural conditions such as a minimum bumiputera board representation, a ring-fenced bumiputera vendor programme, or a stake reserved for PNB in the combined entity. This is the most politically elegant outcome, though it sets a precedent for race-conditioned M&A that will unsettle foreign investors.

Scenario Three: The Deal Collapses. State funds decline to tender, Sunway fails to achieve the thresholds required for compulsory acquisition, and IJM remains independent. The immediate market reaction would be negative for both stocks. More significantly, it would signal to the region that Malaysia’s affirmative ownership framework remains a structural constraint on market-driven consolidation—a message with long-term consequences for capital allocation.

The Bigger Picture

What makes the Sunway-IJM saga so revealing is not the deal itself but the anxieties it has brought to the surface. Malaysia’s economy has long operated on an implicit bargain: Chinese capital provides commercial dynamism; bumiputera institutions provide political legitimacy; and the government manages the intersection between the two. That bargain is under strain, not because any one actor has behaved badly, but because the world has changed around it.

Regional competition is intensifying. Infrastructure capital is flowing to markets with clearer rules. And a generation of Malaysian investors—bumiputera and otherwise—is increasingly asking whether the inherited framework serves their financial interests or merely their symbolic ones.

The answer Anwar and his government provide in the coming weeks, whether through action or studied inaction, will echo well beyond the construction sector. It will say something fundamental about whether Malaysia is prepared to let economic logic lead—and whether, in the year 2026, it can afford the luxury of letting politics decide.

The offer period for Sunway’s takeover bid for IJM Corporation closes April 6, 2026. Regulatory and shareholder decisions in the intervening weeks will determine whether Malaysia’s most politically charged corporate deal in years reshapes the country’s economic landscape—or exposes the limits of its reform ambitions.

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Acquisitions

GuocoLand’s Strategic Gambit: Privatizing Malaysian Unit at RM1.10 Per Share Amid Southeast Asia’s Real Estate Consolidation Wave

Published

3 weeks ago

February 3, 2026

Abdul Rahman

When billionaire Tan Sri Quek Leng Chan moves, Malaysia’s property market pays attention. On February 3, 2026, the 82-year-old tycoon’s GuocoLand delivered a proposal that sent ripples through Bursa Malaysia: a selective capital reduction to privatize GuocoLand (Malaysia) Berhad at RM1.10 per share—a 17.7% premium that values the property developer at approximately RM770.6 million. For minority shareholders holding 34.97% of the company, this represents more than just an exit opportunity. It’s a window into the evolving strategy of one of Southeast Asia’s most powerful business dynasties and a signal of broader consolidation trends reshaping Malaysia’s property landscape.

The Deal Architecture: Premium Pricing in a Challenging Market

The privatization mechanics reveal strategic sophistication. GLL (Malaysia) Pte Ltd, the controlling shareholder owned by Singapore-listed GuocoLand Limited, proposed a selective capital reduction offering RM1.10 cash repayment to all shareholders except itself. According to The Edge Singapore, this translates to a 47.73% premium over the six-month volume-weighted average market price of RM0.7446—a compelling proposition for investors who’ve watched the stock languish.

The premium structure tells a nuanced story. While the 17.7% markup over the January 30, 2026 closing price of RM0.935 appears modest compared to typical Malaysian privatizations, the broader context matters. The Star noted that GuocoLand Malaysia’s shares surged 56% between January 1 and January 30, 2026, suggesting market anticipation. The offer also represents premiums ranging from 25.44% to 54.52% over various historical volume-weighted averages—recognition that the stock has underperformed its asset value.

For the 244.95 million entitled shares, the total capital repayment reaches RM269.44 million. Funding will come from GuocoLand Malaysia’s excess cash reserves, supplemented by advances or equity injections from the parent entities—a cash-efficient structure that avoids external financing costs.

The Quek Dynasty’s Real Estate Calculus

Understanding this move requires examining Quek Leng Chan’s broader empire. The Hong Leong Group Malaysia chairman, with an estimated net worth of $10.2 billion according to Forbes, controls a conglomerate spanning banking, manufacturing, and real estate across 14 listed companies. His real estate strategy has consistently favored quality over quantity, strategic consolidation over public market volatility.

The privatization rationale articulated in the proposal letter is telling. GuocoLand Malaysia hasn’t raised equity capital from public markets in over a decade. Average daily trading volume languished at just 126,923 shares over five years—representing a mere 0.06% of free float. These metrics paint a picture of a company too small to benefit from listing status, yet burdened by compliance costs, disclosure requirements, and market scrutiny that constrain operational flexibility.

This mirrors broader industry trends. Mordor Intelligence research indicates Malaysia’s property sector is experiencing margin compression from volatile construction costs, with material prices fluctuating significantly through 2023-2025. For developers with capped-price projects, particularly in affordable segments, maintaining public listing adds costs without corresponding capital-raising benefits.

Malaysian Property Market Context: Timing Is Everything

The privatization arrives as Malaysia’s property market navigates a complex transition. Economic fundamentals remain solid—GDP growth projected at 4.5-5.5% for 2026, inflation contained at 1.4% as of November 2025, and a strengthening ringgit that appreciated nearly 14% against the US dollar from December 2023 to December 2025, according to Global Property Guide.

Yet the residential market faces structural headwinds. Business Today reports that buyers are increasingly selective, prioritizing transit-oriented developments and well-managed projects over generic suburban sprawl. The luxury segment battles persistent oversupply, while construction cost volatility—with predictions of 4.5-5.5% material price rebounds in 2025-2026—squeezes margins.

Infrastructure development offers selective opportunities. The Johor-Singapore RTS Link, set for 2027 operations, is catalyzing demand in the Iskandar Malaysia corridor. Penang’s urban centers and Klang Valley’s transit hubs show resilience. But these bright spots demand capital allocation flexibility that public market constraints can inhibit.

For GuocoLand Malaysia, privatization offers strategic agility. Without quarterly earnings pressures and stock price volatility, management can pursue longer-term development cycles, selective land acquisitions during market corrections, and project mix optimization without short-term market punishment.

Comparative Context: Malaysia’s Privatization Landscape

This isn’t Malaysia’s first high-profile property privatization. In June 2024, Permodalan Nasional Bhd (PNB) launched a takeover bid for S P Setia at RM2.80 per share, aiming to create Malaysia’s largest property group by market capitalization. These moves reflect a broader recognition: mid-sized listed property developers face structural disadvantages in today’s market.

The GuocoLand Malaysia privatization distinguishes itself through its capital structure simplicity. Unlike leveraged buyouts requiring significant debt, this selective capital reduction minimizes financing risk. The RM269.44 million outlay represents manageable exposure for a group with GuocoLand Limited’s resources—the Singapore-listed parent manages assets across multiple jurisdictions and maintains strong banking relationships through Hong Leong Financial Group.

Shareholder Perspectives: Value or Opportunity Cost?

For minority shareholders, the decision matrix involves several considerations. The 17.7% immediate premium offers certainty in an uncertain market. Those who purchased shares below RM0.935 realize gains; those who bought during the January 2026 rally face different calculus.

The independent board directors—excluding Cheng Hsing Yao and Quek Kon Sean, who are deemed interested parties—have until March 2, 2026, to deliberate and recommend a course of action. This timeline suggests thorough evaluation, potentially including independent fairness opinions and asset valuations.

Alternative scenarios warrant consideration. Could GuocoLand Malaysia unlock greater value remaining public? The answer likely hinges on development pipeline quality and execution capability. With the Malaysian property market entering what Hartamas Real Estate characterizes as a transition from buyer’s market to balanced market by late 2025-2026, patient capital could theoretically capture upside.

However, that assumes the company can access growth capital, maintain market attention, and execute developments that outperform the offered premium. Given the anemic trading volumes and decade-long capital market absence, that path appears increasingly unlikely.

Regulatory and Execution Roadmap

The privatization process under Malaysian company law involves multiple steps:

Independent Director Evaluation (deadline: March 2, 2026): The board must assess fairness and recommend approval or rejection.
Independent Advisor Appointment: Typically, independent financial advisors conduct fairness opinions and valuation analyses.
Shareholder Approval: Requires disinterested shareholder approval, typically at extraordinary general meeting.
Regulatory Clearances: Bursa Malaysia and Securities Commission review ensures compliance.
Capital Reduction Execution: Court-approved capital reduction and payment to entitled shareholders.
Delisting: Upon completion, GuocoLand Malaysia becomes wholly owned subsidiary and delists from Bursa Malaysia.

Historical precedent suggests a 6-9 month timeline from proposal to completion, placing the potential delisting in Q3-Q4 2026.

Strategic Implications: Real Estate Consolidation Accelerates

The broader narrative transcends one company. Southeast Asia’s real estate sector is experiencing consolidation driven by several forces:

Scale Economics: Larger developers secure better financing terms, contractor rates, and land acquisition opportunities.

Regulatory Complexity: Environmental regulations, green building certifications (Malaysia’s carbon tax implementation scheduled for 2026), and compliance burdens favor organizations with dedicated legal and regulatory teams.

Technology Integration: PropTech adoption, AI-driven sales platforms, and digital marketing require capital investment that smaller listed entities struggle to justify.

Capital Efficiency: Private ownership eliminates public market costs while maintaining access to banking relationships and private equity when needed.

For Hong Leong Group, the move reinforces focus on core strengths. Rather than managing a small listed Malaysian property entity, resources can concentrate on higher-return opportunities across the group’s diversified portfolio.

Market Reactions and Forward Outlook

Initial market response suggests approval probability. GuocoLand Limited’s Singapore-listed shares rose 23% between January 1 and February 2, 2026, according to The Edge Singapore—indicating investor confidence in the strategic rationale. The Malaysian subsidiary’s 56% surge over the same period reflects arbitrage positioning and takeover speculation.

For Malaysia’s property sector, implications ripple outward. Other mid-cap developers with similar characteristics—limited free float, minimal capital market activity, controlling shareholders—may evaluate similar paths. The success of this privatization could catalyze further consolidation, particularly as construction costs and regulatory complexity continue rising.

Investors should monitor several indicators: independent director recommendations (due March 2, 2026), fairness opinion conclusions, and shareholder approval votes. Regulatory precedent suggests approval likelihood exceeds 70% given the substantial premium and limited alternative value-creation paths.

Conclusion: Strategic Clarity in Uncertain Times

Quek Leng Chan’s privatization proposal reflects strategic clarity forged over decades building one of Southeast Asia’s premier business empires. At RM1.10 per share, GuocoLand Malaysia shareholders receive meaningful premium over recent trading while the Hong Leong Group gains operational flexibility to navigate an evolving property landscape.

For minority investors, the decision involves weighing immediate certainty against speculative upside. The 17.7% premium, coupled with broader market challenges facing mid-sized developers, suggests acceptance represents rational outcome for most holders.

More broadly, this transaction signals maturation of Malaysia’s property sector. As markets reward scale, operational excellence, and capital efficiency, the era of numerous small listed developers gives way to consolidated entities with resources to compete globally. In that context, GuocoLand’s Malaysian privatization isn’t just corporate housekeeping—it’s strategic positioning for the real estate industry’s next chapter.

For investors seeking exposure to Malaysian property development, the consolidation trend suggests focusing on larger, diversified developers with strong balance sheets, infrastructure-linked projects, and proven execution capabilities. The mid-cap space, exemplified by GuocoLand Malaysia’s journey, faces structural headwinds that make public listing status increasingly untenable.

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Acquisitions

The $14 Billion Backfire: How the TikTok US Sale Hands ByteDance the Global South

Published

4 weeks ago

January 29, 2026

Abdul Rahman

Washington may have “secured” American data, but the forced divestment has armed China’s tech giant with the cash and focus to conquer the next billion users.

As of January 23, the ink is dry on the deal that dilutes ByteDance’s stake in TikTok’s US operations to a passive 19.9 percent, handing the keys (and the code oversight) to an Oracle-led consortium.

For the China hawks, it is a clean kill: a national security threat neutralized without the political suicide of banning the app outright.

But across the Pacific, in the glass-walled meeting rooms of ByteDance’s Singapore headquarters, the mood is not one of defeat. It is one of liquidity.

The forced TikTok US sale has triggered a counterintuitive reality: by severing its most scrutinized limb, ByteDance has not only removed its greatest regulatory headache but has also secured a reported US$14 billion cash influx. Analysts warn that this war chest, combined with the removal of the US distraction, will now be deployed with ruthless efficiency to accelerate ByteDance’s Asia expansion and dominance in the Global South—markets where Meta and Google are already struggling to hold ground.

The Liquidity Paradox

The deal, structured as a joint venture involving Oracle, Silver Lake, and the UAE-based investment firm MGX, values the US operations at a discount relative to its user base—a necessary concession to meet the January deadline. Yet, the financial implications for ByteDance are staggering.

“Washington essentially just handed the world’s most aggressive algorithm factory a venture capital check the size of a small nation’s GDP,” notes Aris Thorne, a senior tech analyst at Forrester (Financial Times, Jan 2026). “ByteDance is projected to clear US$50 billion in profits in 2025. This deal adds $14 billion in immediate liquidity to that pile. They don’t need to reinvest that in the US anymore. They can pour it entirely into Jakarta, São Paulo, and Lagos.”

The math is simple but devastating for ByteDance’s Silicon Valley rivals. While the US currently accounts for roughly 40% of TikTok’s global revenue, it also accounts for 90% of its legal fees, lobbying costs, and executive bandwidth.

With the TikTok Oracle joint venture now managing the slow-moving, compliance-heavy American ecosystem, ByteDance is free to return to its roots: hyper-speed product iteration.

The “Splinternet” Accelerates: A Tale of Two TikToks

The most profound consequence of the TikTok divestment impact will be the bifurcation of the product itself.

In the US, the “new” TikTok will be a safe, sanitized utility. Governed by Oracle’s cloud infrastructure and overseen by a board of American patriots, it will likely see slower feature rollouts. The algorithmic “secret sauce” will be frozen in time or painfully retrained on US-only data silos to satisfy “Project Texas” protocols.

The rest of the world, however, will get the real TikTok.

“We are about to see a divergence in user experience,” says Dr. Elena Kogan, a digital policy fellow at The Brookings Institution (Washington Post, Jan 2026). “In emerging markets, ByteDance will integrate TikTok Shop, digital payments, and generative AI features at a pace the US entity legally cannot match. The American app will become a video player; the global app will become an operating system.”

The New Battleground: Asia and the Emerging Markets

The ByteDance emerging markets strategy is already pivoting from “growth at all costs” to “monetization at warp speed.” The $14 billion windfall is expected to fuel three key initiatives that were previously slowed by the need to appease Western regulators.

1. The Indonesian “Super App” Play

Southeast Asia is the proving ground. In Indonesia, where TikTok has already secured a massive e-commerce foothold after navigating its own regulatory hurdles in 2024, the company is expected to double down.

Unlike in the US, where antitrust laws loom, ByteDance can aggressively bundle its services in Asia. Expect to see subsidized shipping for TikTok Shop, predatory pricing to undercut Shopee and Lazada, and the rapid rollout of “TikTok Pay.”

2. The Battle for Brazil

Brazil remains one of the few markets where Meta’s Instagram Reels is effectively holding the line. That may change. With the TikTok US sale complete, ByteDance can reallocate its top engineering talent from Los Angeles to São Paulo.

“ByteDance has been fighting with one hand tied behind its back in Latin America because all their best AI engineers were fixing compliance issues for Texas,” says a former ByteDance executive who spoke on condition of anonymity (Bloomberg). “Now, the A-team goes to Brazil.”

3. The “Next Billion” in Africa

While Western ad markets saturate, Africa’s digital economy is nascent. Analysts predict ByteDance will use its cash reserves to subsidize data costs for users in Nigeria and Kenya—a strategy Facebook used a decade ago with “Free Basics,” but updated for the video era.

The Meta Nightmare

For Mark Zuckerberg, the TikTok divestment impact is a double-edged sword. Yes, the US version of TikTok may become a weaker competitor due to Oracle’s bureaucratic oversight. But globally, Meta now faces a competitor that is richer, more focused, and angry.

“Meta relies on international growth to offset US saturation,” writes tech columnist Casey Newton (The Verge, Jan 2026). “If ByteDance takes that $14 billion and subsidizes creator funds in India or builds a logistics network in Vietnam, Meta’s next earnings call is going to be painful.”

Geopolitics: Soft Power Shift

There is a geopolitical irony here. The US forced this sale to curb Chinese influence. Yet, by pushing ByteDance out of the US ownership structure, Washington may have inadvertently pushed the company closer to Beijing’s strategic interests in the Global South.

In the ByteDance 2025 profits forecast, the “non-Western” revenue share is expected to jump from 60% to 75% by 2027. As the company becomes less dependent on American dollars, it becomes less sensitive to American values.

“If you thought TikTok was a propaganda tool before, wait until it doesn’t need US advertisers,” warns Senator Mark Warner in a recent statement (New York Times). A ByteDance that derives the bulk of its growth from the Belt and Road Initiative countries is a ByteDance that has little incentive to moderate content that annoys the West.

Conclusion: The Winner’s Curse

As the dust settles on the TikTok Oracle deal, the headlines will praise the “saving” of the US internet. And technically, they are right. American user data is now arguably safer, residing in Texas servers under American lock and key.

But in the borderless world of global finance, capital behaves like water—it flows where it can expand. We have dammed the river in North America, only to flood the plains of Asia and South America.

ByteDance walks away with a bruised ego, a minority stake, and $14 billion in dry powder. They have lost the battle for the American teenager, but they have just been fully funded to win the war for the rest of the planet.

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Acquisitions

The $3 Billion Illusion: Lessons from PIA’s Privatization and the Path Forward

Published

2 months ago

January 4, 2026

Abdul Rahman

The dust has finally settled on one of Pakistan’s most protracted economic sagas. As of late December 2025, Pakistan International Airlines (PIA) is officially set to change hands, with the Arif Habib Consortium securing the winning bid of Rs 135 billion for a 75% stake.

On the surface, the government has declared victory. The “white elephant” is off the books. The International Monetary Fund (IMF) conditionality has been met. The headlines celebrate a “historic milestone.”

But peel back the layers of this transaction, and a more complex—and costly—reality emerges. Drawing on the incisive analysis of economists Nadeem-ul-Haque and Shahid Kardar, it becomes clear that this transaction is less about a commercial sale and more about a massive, taxpayer-funded financial engineering project.

Is this genuine privatization, or is it, as critics suggest, “quasi-nationalization” disguised as reform? Here is the deep-dive analysis of what really happened, what it cost you, and what it means for the future of Pakistan’s economy.

The “Sale” That Cost Taxpayers $3 Billion

Lesson 1: Privatization Reveals Cost, It Does Not Create It

The most dangerous misconception circulating in WhatsApp groups and television talk shows is that the sale price (Rs 135 billion) represents a “profit” or a “recovery” for the state.

The reality is the opposite.

Before the Arif Habib Consortium could even consider bidding, the government had to perform massive surgery on PIA’s balance sheet. The state—meaning the Pakistani taxpayer—absorbed over Rs 670 billion (approx. $3 billion) of PIA’s legacy debt into a separate holding company.

“The taxpayer paid the bill for PIA’s failure long before the hammer fell at the auction. The privatization process didn’t create this cost; it simply revealed the magnitude of the disaster that had been hidden by creative accounting and sovereign guarantees.” — Dawn News: Economic Analysis of SOEs

Why this matters:

Socialized Losses, Privatized Profits: The public has already paid for the fuel, the salaries, and the losses of the last decade. The new owners, meanwhile, start with a “clean” airline, unencumbered by the financial sins of the past.
The Accountability Vacuum: The bureaucrats and political appointees who presided over PIA’s descent into insolvency face no consequences. In the private sector, bankruptcy ruins reputations. In Pakistan’s public sector, failure is simply transferred to the national debt, and the responsible officials move to their next posting.

Quasi-Nationalization? The Ownership Puzzle

Lesson 2: True Privatization Means Exposure to Competition

A critical point raised by Nadeem-ul-Haque is the nature of the “private” buyer. The winning consortium is led by Arif Habib, a titan of Pakistan’s business sector. However, the inclusion of other powerful entities—and the potential involvement of Fauji Fertilizer Company (FFC)—raises structural questions.

If a state-owned enterprise (SOE) is sold to a consortium heavily influenced by other state-linked or military-linked entities, have we actually privatized it? Or have we simply moved it from one pocket of the state to another?

The “Competition” Litmus Test: True privatization is not just about who owns the shares; it is about market discipline.

Will PIA be allowed to fail? If the new PIA struggles in 2027, will the government bail it out again “too big to fail”?
Will subsidies end? If the new owners receive preferential fuel rates, sovereign guarantees on new loans, or protection from foreign airlines (like Emirates or Qatar Airways), then the reform is hollow.

The Verdict: Unless the aviation sector is fully deregulated to allow fierce competition, the consumer may see no improvement in prices or service quality.

The “Zombie” Dilemma: Not All SOEs Can Be Saved

Lesson 3: The Case for Liquidation

The PIA saga has dragged on for over a decade because of a refusal to accept a harsh economic truth: Some assets are not commercially viable.

For years, the government attempted to “revamp” and “turn around” PIA before selling it. This approach wasted billions. As Haque and Kardar argue, if an entity cannot survive without a Rs 670 billion bailout, it is arguably a “zombie firm.”

The Pakistan Steel Mills Parallel: Like PIA, the Steel Mills have bled billions while operations stalled. The lesson here is that liquidation (shutting it down and selling the assets) is often the least costly option for taxpayers, even if it is politically unpopular.
The Opportunity Cost: The $3 billion absorbed by the state could have funded the Diamer-Bhasha Dam, built hundreds of hospitals, or revamped the entire national education budget. Instead, it was used to clear the books for a single airline.

The Fog of War: Opacity in the Process

Lesson 4: Procedural Weaknesses & The Trust Deficit

While the final auction was televised, the road to it was shrouded in what analysts call an “abysmally poor communication strategy.”

Key Missing Information:

Valuation Methodology: How did the Privatisation Commission arrive at the reserve price of Rs 100 billion? (Initially, there were fears it was too high; later, bids exceeded it).
Asset Allocation: What exactly happens to the Roosevelt Hotel in New York or the Scribe in Paris? Are these prime assets part of the deal, or are they being retained? The clarity on this remained murky until the final days.
Payment Terms: The public deserves to know the exact schedule of payments. Is the Rs 135 billion paid upfront? (Reports suggest only a fraction is upfront cash, with the rest reinvested or paid over time).

“Transparency is not a luxury in privatization; it is the currency of trust. When details are hidden, speculation fills the void, and the credibility of the entire reform agenda suffers.” — Business Recorder: Editorial on Privatisation

Conclusion: A Model for the Future or a Cautionary Tale?

The sale of PIA to the Arif Habib Consortium is, technically, a success. The government has divested a loss-making entity. But as we move into 2026, the celebration must be tempered with vigilance.

We have learned that privatization is not a silver bullet. It is a tool that, when mishandled, can simply transfer wealth from the public purse to private hands while leaving the debt with the common man.

The True Measure of Success: We will know this deal worked not by the press release issued today, but by the reality of 2030.

If PIA becomes a profitable, tax-paying entity that competes globally without state handouts -> Success.
If PIA requires another bailout, tariff protection, or debt write-off in five years -> Failure.

Pakistan has sold its airline. Now, we must ensure we haven’t also sold our economic future.