MTC acquires Celtel for US$3.4 bil.

The deal brings to an end moves by Celtel to list shares on the London and Johannesburg stock exchanges this year.

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By  Tawanda Chihota Published  March 29, 2005

Kuwaiti mobile operator MTC has announced the acquisition of pan-African mobile operator Celtel International for a consideration of US$3.4 billion in cash. The deal brings to an end moves by Celtel to list shares on the London and Johannesburg stock exchanges this year. Under the terms of the offer, MTC will acquire immediately 85% of Celtel’s issued capital for US$2.84 billion, and the remaining 15% within two years. Celtel’s CEO, Mo Ibrahim, held a 23% stake in the operator, employees held 11%, while external shareholders included CDC Capital Partners and WorldTel Africa. The acquisition will be funded through a combination of existing cash and newly raised debt. Celtel will remain a separate legal entity within the MTC Group of Companies and will retain its existing head office and management structures in both Amsterdam and in each of the thirteen African countries of operation. The operator will also continue to operate under its brand name. At the beginning of March, Celtel reported net profit of US$147 million for the year to end-2004, boosted by organic growth in subscribers and the acquisition of a 60% stake in Kenyan operator KenCell in the middle of 2004. Net profit came in at US$73 million in 2003. Consolidated revenues for the year amounted to US$614 million, up 62% year on year, though ARPU for the year fell 16% to US$21 on account of increased market penetration. Celtel recorded 5.2 million managed mobile subscribers at the end of 2004, up 108% from 2.5 million at the end of the previous year. Proportionate subscribers came to 3.6 million users, up 118% year on year. For MTC, this acquisition forms part of its ‘3x3x3’strategy of expansion, which is geared towards seeing the operator grow regionally and internationally. Outside of its home market of Kuwait, MTC already holds stakes in operations in Bahrain, Jordan, Lebanon and Iraq. As part of its investment programme, the operator had stated its intention to count five million subscribers by the end of 2005 across all of its operations and 15 million by 2011. MTC had 3.2 million subscribers at the end of 2004.

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