(Bloomberg) -- Axiata Group Bhd. will refrain from undertaking mergers and acquisitions in the near term as Malaysia’s biggest wireless carrier looks to improve its operations, people with knowledge of the matter said.

The decision was made at a board meeting last week and follows the collapse of talks for a merger with Telenor ASA’s Asian business, said the people, who asked not to be named as the information is private. Axiata won’t proceed to formal negotiations for any approach for its $3 billion wireless tower business or its Indonesian telecommunications operations at least before the end of the year, the people said.

Hong Kong’s CK Hutchison Holdings Ltd. has informally expressed interest in exploring a combination of its Indonesian wireless business with the Malaysian carrier’s local unit, PT XL Axiata, people familiar with the matter have said. Axiata’s Chief Executive Officer Jamaludin Ibrahim said in a September interview that tower business unit Edotco Group Sdn. has received some takeover interests, confirming an earlier Bloomberg report.

Axiata, which counts Malaysia’s sovereign wealth fund Khazanah Nasional Bhd. as its major shareholder, may revisit some of the offers next year when it is on a stronger footing, the people said. The company is expected to report a 1.2 billion ringgit ($285 million) net income this financial year, a turnaround from a loss of 5 billion ringgit in 2018, according to the average of analyst estimates polled by Bloomberg.

The pause on deals echo with Jamaludin’s remarks that the telecom giant will keep focusing on operational efficiency as the industry is slowing down, while mergers remain a key strategy in the longer term. It also comes after Axiata and Telenor last month mutually ended talks on combining their Asian operations to create a company with $13 billion in sales and with 300 million customers across nine countries.

Axiata’s top priority is to focus on delivering on its goals of profitability and cash generation, while consolidation remains important to the company’s growth strategy in some markets, a representative wrote in an emailed response to Bloomberg.

“We wish to stress we are not compelled to secure deals but are cognizant that the process of consolidation takes up to a year to conclude and another two to three years to reap its synergies,” the representative said. “Therefore, discussions on potential strategic partnerships should begin now.”

To contact the reporters on this story: Elffie Chew in Kuala Lumpur at echew16@bloomberg.net;Manuel Baigorri in Hong Kong at mbaigorri@bloomberg.net

To contact the editors responsible for this story: Fion Li at fli59@bloomberg.net, Ville Heiskanen

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