Saudi wealth fund to buy a majority stake in Zain telecom towers

Saudi wealth fund to buy a majority stake in Zain telecom towers

The Public Investment Fund, Saudi Arabia’s sovereign wealth fund, has submitted an offer to buy a 60% stake in the mobile phone towers unit of the kingdom’s second-largest telecom company, Zain KSA.

PIF's offer to buy a 60% stake for $484 million in Zain Saudi Arabia’s towers infrastructure in a deal that would value the unit at SAR3 billion ($807m), said local media reports.

In a filing with the Saudi Stock Exchange, the operator stated its board approved the non-binding offers. Prince Saud Bin Fahad and Sultan Holding Company will each take 10% stakes.

Combined, the three investors will take over 8,069 towers. Zain will keep ownership of the remaining 20% of the tower unit, including wireless communication antennas, software, technology, and IP.

If the deal goes ahead it would be the first sale of telecoms infrastructure in the kingdom, despite years of the three main mobile operators trying to reach a deal with each other or with external investors.

Zain KSA is the Saudi unit of Kuwait-based telecoms operator Zain Group.

“The offers submitted do not represent any binding commitment and the final agreements are subject to the approval of the official authorities, internal approvals of the respective acquirers, the completion of satisfactory due diligence by the acquirers, and any other conditions that may be agreed between the parties,” Zain KSA said.

Earlier this year JV plans between Zain KSA and fellow Saudi telecoms player Etihad Etisalat Co., or Mobily, to merge the towers of both under a single entity fell through when Mobily backed out citing strategic reasons.