Bharti starts 40-day talks to acquire Kuwait's Zain
Tuesday, 16 February 2010, 15:31 IST
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New Delhi: India's largest private telecom services provider, the Sunil Mittal-controlled Bharti Airtel, Monday said it has started exclusive talks to acquire Kuwait's Zain for $10.7 billion to get a foothold in the African market. The takeover will not include Zain's assets in Morocco and Sudan, the company said about the bid -- its third such attempt to enter the largely untapped African market after failing to enter into a merger pact with South Africa's MTN on two occasions. Africa accounts little over 60 percent of Zain's 71.8 million customers. "Bharti Airtel and Zain have agreed to enter into exclusive discussions until March 25 for acquisition of Zain's Africa unit based on an enterprise value of $10.7 billion," the Indian company said in a statement. "This potential transaction does not include Zain's operations in Morocco and Sudan and remains subject to due diligence, customary regulatory approvals and signing of final transaction documentation," the statement added. "There can be no assurance the transaction can be consummated." Bharti Airtel is among Asia's leading telecom services providers with operations in India and Sri Lanka. It had an aggregate of over 118 million customers as of end-November 2009, including 116.01 million mobile customers. Some of the highlights of the proposed deal with Zain include: - Offer of $10.7 billion for Zain's assets - Deal Excludes Zain's operations in Morocco and Sudan - Zain has over 71.8 million customers in 23 countries - In Middle East, it has 29.9 million and in Africa 41.9 million customers - Zain is listed on Kuwait Stock Exchange with 100 percent free float - Its largest shareholder is Kuwait Investment Authority with 24.6 percent - The company's consolidated revenue amounted to $6.1 billion last year Bharti Airtel, which has been on the lookout for an overseas acquisition for over two years now, said last month it would acquire a 70-percent controlling stake in the Bangladesh-based Warid Telecom to expand its global footprint. The company had late last year failed to strike a deal for the second time with South African telecom giant MTN. The deal, worth some $24 billion in cash and equity, had called for Bharti to get 49-percent stake in MTN, and the South African firm and its shareholders 36 percent equity in the Indian telecom major. But the deal got stuck because of the different policies followed by the two countries.
Source: IANS
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