Zain-Paltel share swap deal abandoned
Kuwait's Zain says lack of government approval to blame for cancellation of proposed share swap deal with Paltel
Zain has confirmed that a deal to take control of Palestine's incumbent operator Paltel has been abandoned, citing a lack of government approvals for the deal.
The deal, which would have seen Zain Group take a 56.5% stake in Paltel, with Paltel owning 100% of Zain Jordan, was expected to generate some US$1 billion in annual revenues in 2009.
On Thursday the Paltel board released a statement that said it considered the arrangement no longer effective. This was followed by a statement from Zain.
Zain Group chief communications officer, Ibrahim Adel, said: "Zain management confirms that the merger agreement between Zain and Paltel announced earlier this year will not take place, because Zain did not receive the required government approvals that were condition precedent to concluding the deal."
News of the deal first surfaced in January when both sides confirmed that talks were taking place. Zain and Paltel then entered into an arrangement in May for a share-for-share exchange.
At the time, Zain said "the transaction will close in Q2, 2009 subject to the approvals of Telecommunications and Securities market regulators in applicable jurisdictions".
Paltel provides fixed line services and through sub-brand Jawwal it serves 1.5 million subscribers. Earlier this month Jawwal's monopoly was broken when mobile operator Wataniya Palestine launched.