The Kuwaiti operator Zain has accepted a preliminary offer by UAE market leader Etisalat to take a majority stake in the firm.
The UAE-based operator’s bid for 46% of the firm met with the approval of Zain’s main shareholder, the Kharafi family, and an agreement has been signed, in a deal worth US$11.7 billion.
The offer amounts to a majority stake as 10% of Zain’s shares are held by the national treasury; Etisalat would therefore hold 51% of the Kuwaiti firm’s issued share capital.
There are certain conditions attached to the offer, including the completion of satisfactory due diligence. In addition, Zain’s Saudi operations are to be sold as Etisalat already operates in the kingdom under the Mobily brand; owning both businesses would breach Saudi regulations.
Etisalat’s chairman, Mohammad Omran, has stated: "Matters are still at an early stage, and the information and data currently available to us are partial. Once the rigorous process of due diligence is completed, the picture will become clear and we will then be in full possession of the pertinent details.”
Omran also noted that Zain’s international operations cover several areas in which Etisalat does not currently operate, and thus complement Etisalat’s operations well. The offer remains preliminary, and will be disregarded unless an agreement is finalised by 15 January 2011.