Etisalat confirms bid for Zain is off
Cites long due diligence process, divided Zain shareholders and regional unrest for failure of deal
Published: 21 March, 2011
READ MORE: M&A | Africa & Middle East | Zain Group
The long saga of Zain's attempt to sell a 46% stake to Etisalat of the United Arab Emirates has ended in failure, with the latter admitting the $12bn deal was "no longer viable". Etisalat said it had called off the talks, having missed a previous deadline, after receiving "the results of extensive due diligence", and also cited "current political unrest in the region" and some recent changes in M&A law in Zain's homeland, Kuwait.
Etisalat made its move in September and followed up with a conditional binding offer in November, but its bid never gained unanimous support from Zain's shareholders, some of whom objected to the need for Zain to sell its Saudi Arabian arm, a key asset, as a condition of the transaction (Etisalat already has its own Saudi business and the dual holdings would not be allowed under the country's competition laws). That obstacle appeared to have been resolved last week when it was reported that Zain had agreed to sell its 25% stake in its Saudi business to a consortium of Batelco of Bahrain and Kingdom Holding.
But the Kharafi family, one of Zain's largest shareholders, had meanwhile withdrawn their previous support for Etisalat, which appears to have been the last straw.
The Batelco deal is also likely to be called off now, as Zain may find a buyer which could also take on the Saudi stake, potentially increasing the overall purchase price. A Zain spokesman told Reuters that the firm's board would now need to decide whether to sell. Batelco CEO Peter Kaliaropoulos commented: "We were not buying Zain, we were buying a stake in Zain Saudi Arabia, and we are still interested in that. Now the question is, will Zain still sell it? But we will proceed."
More M&A News
More AFRICA & MIDDLE EAST News
More ZAIN GROUP News
COMMENTS
Carrier Broadband Performance: Africa & Middle East
Carriers are using mobile broadband as their weapon of choice in the fight against the commoditization of voice and falling ARPU. This...
Voice over LTE: Market Analysis and Forecasts
VoLTE offer unique advantages in lowering a carrier's voice infrastructure economics and promises to improve voice quality, device...
Satellite Phones: Will Dual Mode Help the Phoenix Rise from the Ashes?
Satellite phones have followed an arduous path since their much-hyped launch more than a decade ago. The hype was followed by an e...
