Kuwait's Zain Telecom on Thursday confirmed that its board of directors has approved the offer from India's top telecom operator Bharti Airtel to acquire its African assets, other than those in Morocco and Sudan.
"The company confirms that the board of directors of Zain met in Kuwait on Wed, March 24 to review the latest developments and negotiations related to this matter," the Kuwaiti company said in a statement Thursday.
"The board is pleased to report that due diligence process has been completed and that the parties are finalising definitive agreements which are expected to be signed in the coming days."
Bharti will pay $9 billion to acquire Zain's assets spread across 15 African countries. It will also adopt $1.7 billion of Zain's debt.
The confirmation saw the scrip of Bharti Airtel gain 1.29 percent, or Rs.3.95, in the early hours of trading Thursday, to rule at Rs.310.75. The scrip had earlier shot up to Rs.316.70.
This has been Bharti's third attempt to enter the largely untapped African market after failing to enter into a merger pact with South Africa's MTN on two occasions.
Africa accounts a little over 60 percent of Zain's 71.8 million customers.
Bharti Airtel is among Asia's leading telecom service providers with operations in India and Sri Lanka. It has an aggregate of over 118 million customers as of November 2009, including 116.01 million mobile customers.
Some of the highlights of the deal with Zain include:
- Offer of $10.7 billion for Zain's assets
- Deal excludes Zain's operations in Morocco and Sudan
- Zain has over 71.8 million customers in 23 countries
- In the Middle East, it has 29.9 million and in Africa 41.9 million customers
- Zain is listed on Kuwait Stock Exchange with 100 percent free float
- Its largest shareholder is Kuwait Investment Authority with 24.6 percent
- The company's consolidated revenue amounted to $6.1 billion last year
Bharti Airtel, which has been on the lookout for an overseas acquisition for over two years now, said last month it would acquire a 70 percent controlling stake in the Bangladesh-based Warid Telecom to expand its global footprint.
The company had late last year failed to strike a deal for the second time with MTN.
The MTN deal, worth some $24 billion in cash and equity, envisaged Bharti getting 49 percent stake in MTN, and the South African firm and its shareholders 36 percent equity in the Indian telecom major.
But it got stuck because of the different policies followed by the two countries.