Etisalat, the UAE operator, has signed an agreement with Vivendi to buy the French conglomerate’s 53% stake in Maroc Telecom.
Etisalat has made a binding offer to pay €3.9bn (US$5.3bn) for the stake in the Moroccan incumbent, equivalent to Dh92.6…
Etisalat, the UAE operator, has signed an agreement with Vivendi to buy the French conglomerate’s 53% stake in Maroc Telecom.
Etisalat has made a binding offer to pay €3.9bn (US$5.3bn) for the stake in the Moroccan incumbent, equivalent to Dh92.6 (US$11.14) per share. On top of that, the UAE telco said it will pay Maroc Telecom’s 2012 dividend of €300m (US$404.8m) to Vivendi.
The conglomerate said previously that, taking into account Maroc Telecom’s net debt, the transaction “is being carried out at a proportional enterprise value for Vivendi’s stake of €4.5 billion, corresponding to an EBITDA multiple of 6.2x.” For the first half of 2013, Maroc Telecom reported earnings of €326m.
Closing of the deal is subject to several conditions, including the execution of a shareholders’ agreement with the Kingdom of Morocco, which has a 30% stake in Maroc Telecom. The remaining 17% is in free float.
The transaction also needs to secure competition and regulatory approval in Morocco as well as other jurisdictions where the company is present. Maroc Telecom has subsidiaries in Burkina Faso, Gabon, Mali and Mauritania.
Vivendi expects to complete the sale by early 2014.
Etisalat secured a US$8bn dual-tranche loan facility from a syndicate of local and international banks to fund the acquisition earlier this year.
The operator is advised by BNP Paribas while Vivendi hired Credit Agricole and Lazard for the stake sale. Moelis & Company is advising the Emirates Investment Authority, which has a stake in Etisalat.
The sales process was initiated in October last year and both South Korea’s KT Corp and Qatar’s Ooredoo had also expressed interest in the Moroccan asset. They both later pulled out of the bidding process.
The now-announced deal forms part of Vivendi’s strategy to focus on its media operations, as opposed to telecoms, and to cut its €6.5bn debt load. The conglomerate recently sold its video game publisher Activision Blizzard for US$8.2bn and is expected to spin off its French mobile unit SFR next year.
For Etisalat, the purchase will represent one of its largest transactions in almost 10 years. The telco is already present in several countries across the Middle East and Africa, as well as in Asia, and the Maroc Telecom acquisition will allow it to expand its footprint in the region.
Maroc Telecom is the largest mobile operator in the country, which is home to another two players. Mobile penetration is almost 120%. The incumbent also provides fixed-line and internet services.
