Etisalat may only buy 40% of Zain

Etisalat reportedly reduces bid to acquire Zain, would no longer gain controlling interest

Tags: Etisalat International - UAEMergers and acquisitionsZain Group (www.zain.com)
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Etisalat may only buy 40% of Zain Etisalat has been trying to take over Zain. (Getty Images)
By  Mark Sutton Published  December 16, 2010

Etisalat has lowered its targeted share of Zain to 40% after shareholder opposition threatened to delay the sale, according to Reuters.

The UAE operator was in talks to buy a 46% stake in Zain, from a consortium including the Kharafi Group conglomerate, but Reuters said that two unamed sources close to the deal said that stake had now been cut to 40%.

Objections from shareholders outside the consortium had threatened to block the transaction from going through.

Al Fawares Holding, which owns a 4.5% stake in Zain, took legal action to halt the due diligence in the planned sale, although a ruling was not due until 22nd December.

The revised bid will now mean that instead of gaining a controlling interest in Zain, which the 46% of shares together with treasury shares owned by Zain, Etisalat now stands to become a major shareholder instead.

Etisalat is looking to access lucrative Middle East and African markets through Zain’s extensive operations in the region.

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