Qtel buys Orascom's Tunisiana stake in $1.2bn deal

Qtel takes majority stake in Tunisian mobile operator

Tags: Mergers and acquisitionsOrascom Telecom HoldingQatar TelecomTunisia
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Qtel buys Orascom's Tunisiana stake in $1.2bn deal Qtel has taken a majority stake in Tunisiana.
By  Shane McGinley Published  January 6, 2011

Qatar Telecom (Qtel) has become the majority stakeholder in North African telecom unit Tunisiana following the completion of its joint venture deal to acquire Orascom Telecom Holding's 50% stake in the firm, the Qatari telecoms operator announced on Wednesday.

"As previously communicated, the stock was acquired for a total consideration of $1.2bn," Qtel said in a statement.

The Tunisiana deal to acquire Cairo-based Orascom's stake was masterminded as part of Qtel's joint agreement with the Princesse Holding Consortium, which is led by Sakher El Materi, the son-in-law of Tunisian President Zine El Abidine Ben Ali.

Under the joint agreement, Princesse Holding will acquire a 25% stake in Tunisiana, while National Mobile Telecommunications Company (Wataniya), which is 52.5% owned by Qtel, will increase its current stake from 50 to 75%, Qtel confirmed in its statement.

Wataniya will finance its increased stake through a mixture of existing cash and debt. The agreement will also see Al Materi become the new chairman of Tunisiana.

"Qtel has consistently and confidently pursued a strategy of actively developing a global portfolio of assets. By further increasing our shareholding in Tunisiana, which has already earned a strong market position, we will be able to ensure that the company advances to the next stage of development, delivering additional products and services for its customers, as well as benefits for all Qtel Group's stakeholders," said HE Sheikh Abdullah Al Thani, chairman of Qtel.

Qtel acquired its stake in Wataniya in 2007 and Tunisiana "has since proven to be an outstanding asset," Qtel said. The completion of the deal will make Qtel Group the largest communications group in the Middle East and North Africa, with nine controlled operations and a presence in seventeen countries.

Orascom's sale of its 50% stake could affect the valuation of its Algerian unit, Djezzy, which it is in negotiations to sell to the Algerian government, it was claimed on Wednesday.

At $1.2bn, the price is 6.7 times Tunisiana's earnings before interest, taxes, depreciation and amortization, Orascom said in a statement to the Cairo bourse.

"This deal could affect the valuation for Djezzy," Ahmed Adel, telecom analyst at Cairo-based Naeem Brokerage told Bloomberg. "Any adviser making the valuation for Djezzy should take into consideration the region's recent deal multiples."

Algeria's government, which has said it wants to buy Orascom's local unit, ordered Djezzy to pay more than $800m in taxes after reassessment and barred it from transferring money outside the North African country. Orascom diputed the order and said it may seek international arbitration.

Orascom is currently in talks to sell assets to Russian group VimpelCom, a deal that would create the world's fifth biggest mobile phone operator.

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