Latest Comments

  • PREMCHANDRA J LOKHAN... More
    i support ericsson as rcom can dupe anyone , they had... Sunday, 14 October 2018
  • Bud Biswas More
    Our company, Polaris Networks, has helped other smaller... Friday, 12 October 2018
  • Developing Telecoms More
    That is correct - it is the coastline of Equatorial Guinea,... Friday, 12 October 2018
  • Xavier Muñoz More
    This photo is not from São Tomé e Príncipe Thursday, 04 October 2018
  • adewalebeke@yahoo.co... More
    Hello,
    My name is Adewale. I am a Healthcare Manager in... Friday, 21 September 2018

Etisalat still looking to resolve Zain deal despite missing deadline

Although the original deadline for a final deal was 15th January, Etisalat has stated that it will persist in its attempt to purchase a 46% stake in Zain although its initial offer has now expired.

Etisalat has claimed that the reason for the elapsed deadline was “unforeseeable delays in Zain providing access to all relevant information which is required for Etisalat to complete its due diligence process.”

A new deadline for any potential agreement has not yet been mooted, but Etisalat has stated that it will inform shareholders of any new developments “in due course”. Recent indications that Etisalat’s bid could be derailed by the Turkish conglomerate Cukurova Holding appear inaccurate – although there have been rumours that Cukurova is attempting to purchase a 29.9% stake in Zain, the Kuwaiti operator has claimed that it knows nothing about such a transaction.

This is reinforced by the confirmation from National Investments Co (owned by Zain’s biggest shareholders, the Kharafi Group) that they will continue their attempts to close the deal with Etisalat.

The proposed deal has met with resistance from various minority shareholders in Zain due to the potential overlap of operations in Saudi Arabia; should the deal close, Zain’s operations would be sold off to bring Etisalat into compliance with Saudi regulatory standards. As these operations are profitable, many shareholders are reluctant to dispose of them.

If the deal doesn’t go through there could still be good news for emerging markets in the form of the Zain’s contingency plan.

The operator has stated that it is looking into increasing its presence in emerging markets in the event that the deal falls through, with Zain COO Barrak al-Sabeeh saying: “As of now, because of the non-clarity of the Etisalat deal, we should just keep our focus on what we have. Once things are clear, definitely we will look into good opportunities to expand.”

Al-Sabeeh went on to detail the emerging markets that Zain would consider buying into if the deal with Etisalat did not close. “Most of the operations we have are saturated. So you should look into emerging markets or new licenses in some of the tempting markets, such as the Far East, Indian subcontinent, East Europe, Lebanon”, he commented.

“The challenge for this year and next is huge, especially in the saturated markets of Bahrain, Kuwait and Jordan,” he continued. “Sudan and Iraq are the two areas where we are expecting growth because penetration hasn’t reached 100 percent. And we expect to have better results in 2011 than 2010 in terms of net profit.”

He clarified that Zain would likely attempt to purchase current operations rather than a start-up licence. Al-Sabeeh conspicuously failed to mention Africa in his list of ‘tempting’ markets; last year, Zain sold almost all of its African operations to the Indian firm Bharti.

Comments powered by CComment