Bharti Airtel has entered exclusive negotiations with Zain after offering US$10.7bn to buy the Kuwaiti group’s African operations, excluding its Morocco and Sudan assets.
The two parties have set a deadline of March 15 to conclude the talks, Bharti said…
Bharti Airtel has entered exclusive negotiations with Zain after offering US$10.7bn to buy the Kuwaiti group’s African operations, excluding its Morocco and Sudan assets.
The two parties have set a deadline of March 15 to conclude the talks, Bharti said in a statement.
Any potential deal remains subject to due diligence and customary regulatory approvals, Bharti added.
This is Bharti’s third major attempt to gain a foothold on the African continent, after two failed merger talks with MTN, including last year’s attempt which collapsed largely due to South African regulations.
The Indian operator recently bought a stake in Warid Bangladesh and has repeatedly stated its ambitions to look abroad as the Indian market is becoming increasingly competitive.
Zain, meanwhile, lost its main obstacle to a sale after Saad al Barrak resigned from his role as CEO on February 3. Unlike al Barrak, who led Zain’s expansion into Africa, shareholders led by the Kharafi family are keen to sell the group’s African assets. The Kharafi group has made it clear that shareholders would lead any initiative, as shown when they drummed up support among shareholders holding 46% of Zain to sell a stake in the entire group to the Vavasi consortium.
In June last year, Zain mandated UBS to review its operations in Africa, which span some 16 countries and account for two-thirds of Zain’s customers but have proved highly capex-intensive, while yielding little profit (only 15% of the group’s total profit). The most serious suitor was understood to be Vivendi, advised by Calyon, but talks collapsed after the buyer and seller disagreed on a price.
Since then, global operators including China Mobile, Vodafone and France Telecom have been rumoured to be eyeing the assets.
Standard Chartered, Barclays and First Africa had advised Bharti on its talks with MTN last summer.
