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Etisalat inks due diligence agreement

Telco signs agreement with Zain shareholder to start due diligence for acquisition

Etisalat is starting due diligence for the acquisition of Zain Group.
Etisalat is starting due diligence for the acquisition of Zain Group.

Etisalat and Kharafi Group, a major shareholder in Kuwait's Zain Group, have signed an agreement to start the due diligence for a deal that could see the UAE incumbent acquire a 46% stake in Zain, according to a report from Reuters.

The report quotes a statement posted on the Kuwait bourse by National Investments Co, a Kharafi Group unit. "We were informed by our client that Al Khair National and Emirates Telecommunications Co have signed an agreement, and the due diligence will start," the statement said.

Etisalat submitted an offer to buy a 46% stake in Kuwait Group in September. The UAE telco is understood to have bid 1.7 dinars ($6.06) per share in a deal worth about $12 billion.

Last month, Etisalat's CEO, Mohammed Omran, said that Etisalat's decision whether to proceed with the deal would depend on the due diligence process confirming that the deal represented "great value" for Etisalat's shareholders. "We will not proceed unless such valuation is confirmed," Omran said.