Etisalat gears up to close Vivendi acquisition.
Emirates Telecommunication Corporation or Etisalat is set to close the acquisition of 53 per cent shares from France's Vivendi in Maroc Telecom on May 14.
The take over deal will cost $5.8 billion. Etisalat, which serves 145 million subscribers in 15 countries of Asia, Africa and the Middle East, in a move towards consolidating its operations in Africa, agreed to sell its West African assets to Maroc Telecom. The deal, valued at $650 million, includes units West African countries of Benin, Central African Republic, Gabon, Ivory Coast, Niger and Togo. "These operations provide both mobile and data services and operate under Moov brand," the telecom provider said in a regulatory filing to the Abu Dhabi Securities Exchange.
In November Etisalat agreed to acquire Vivendi's 53 per cent stake in Maroc Telecom in the Middle East's largest takeover of a phone carrier. Putting the West African assets under Maroc Telecom would extend its reach beyond Morocco, Mauritania, Burkina Faso, Mali and Gabon.
"It really makes sense they're doing this," said Sanyalaksna Manibhandu, an analyst at NBAD Securities in Abu Dhabi. "It's a move to consolidate control of their west African assets as they obviously think Maroc Telecom can manage them better out of Casablanca better than they can out of the UAE." The deal is subject to the completion of the Maroc Telecom acquisition, Etisalat said. Etisalat last month signed a $4.4 billion deal with 17 banks to fund the acquisition of the Maroc Telecom stake. "The transaction will be completed at the end of this month," according to Etisalat's chief financial officer Serkan Okandan.
Closing of the deal is subject to a number of conditions precedent, including among others, the closing of the acquisition by Etisalat of Vivendi's 53 per cent shareholding in Maroc Telecom and securing competition and regulatory approvals in the six West African nations. Vivendi said at the time that the agreement was final, although it was subject to some conditions, notably approval from regulatory authorities in countries where Maroc Telecom operates.
The government owns 30 per cent of Maroc Telecom, with the remaining 17 percent the company's free float. Former monopoly Maroc Telecom, whose annual profit fell 17 per cent to $682.78 million last year, also has operations in Gabon, Mauritania, Burkina Faso and Mali. In Africa, Etisalat's revenue declined one per cent to Dh700 million in the first quarter because of intensifying competition in the Ivory Coast and currency devaluation in Sudan, it said in its financial statements in April.
The sale of the West Africa assets also includes Prestige Telecom in the Ivory Coast, which provides IT services to the operations of Etisalat in these countries, Etisalat said in its statement. For Paris-based Vivendi, selling its telecommunications assets is a key part of its plan to transform into a new entity built around music, pay-TV, European cinema and Internet in Brazil. Vivendi last month agreed to sell its French phone unit SFR to cable billionaire Patrick Drahi's Altice SA in a $23 billion transaction.
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|Publication:||Khaleej Times (Dubai, United Arab Emirates)|
|Date:||May 8, 2014|
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