Etisalat agrees to submit offer for 51% of Zain
UAE telco sets out conditions for Zain acquisition and gives deadline of January 15
Etisalat confirmed yesterday that it had agreed to submit a conditional offer to acquire 51% of Zain Group's total issued share capital for KWD1.7 ($6.06) per share, through AlKhair National for Stock and Real Estate Company.
The UAE telco added that the deal will be subject to various conditions. These include the disposal by Zain of its entire interest in Zain KSA "in a timely fashion", the negotiation of definitive transaction documents, the completion of satisfactory due diligence, and the receipt of all applicable regulatory approvals.
Etisalat also said there should be "no material adverse change in Zain's business, financial, or regulatory affairs, as well as other customary conditions".
Etisalat said that its proposal will terminate unless the parties have entered into "definitive transaction documents" by 15 January 2011.
"It is expected that our due diligence and other work required to reach definitive agreements, if successful, would take a number of weeks and, if signed, the transaction is unlikely to close before the end of first quarter of 2011," the company said in a stratement.
Mohammed Omran, chairman, Etisalat, said that the deal remained "at an early stage" and that a "rigorous process of due diligence" would give the company the facts it needed to make a decision to go ahead with the deal.
"It must be said here that Zain's performance is good and the company enjoys an excellent reputation and has a highly qualified and professional staff," Omran added.
Omran said that, based on preliminary studies, the deal "provides excellent integration" given that much of Zain's geographic footprint, which covers Sudan, Iraq, Kuwait, Jordan, Bahrain, Lebanon and Morocco, complements that of Etisalat.
"Etisalat's strategy is based upon sound and calculated foundations, one of the most important of which is expansion into regional and international growth markets which offer great opportunities to increase and diversify our sources of revenue. This is the strategic decision which has been affirmed by Etisalat's Board of Directors," he said.