Qatar Telecom (Qtel) has agreed to double its stake in Iraqi mobile operator Asiacell to 60% in a deal worth US$1.47bn.
Qtel said it will initially increase its stake in Iraq’s second largest mobile operator from 30% to 53.9%, acquiring the extra…
Qatar Telecom (Qtel) has agreed to double its stake in Iraqi mobile operator Asiacell to 60% in a deal worth US$1.47bn.
Qtel said it will initially increase its stake in Iraq’s second largest mobile operator from 30% to 53.9%, acquiring the extra 6.1% when it secures the requisite approvals from the Iraqi government and regulatory authority.
The Qatari incumbent will finance the transaction using existing funds, according to a company statement.
Qtel did not reveal the sellers, but Reuters cited two unnamed sources as saying they are Iraq’s Farouk Group Holding, which has a 51% stake in Asiacell, and private equity firm MerchantBridge, which has a 19% stake.
Qtel chairman Sheikh Abdullah Bin Mohammed Bin Saud Al-Thani said the purchase aligns with its long-term strategy to boost its stakes in companies with “significant potential”.
In his view, Asiacell is well placed to take advantage of rising demand in Iraq, which is yet to launch 3G services. “The Iraqi market is about to enter a period of rapid broadband and data growth …,” he said.
Sheikh Abdullah said Qtel would “continue to work hard” on helping Asiacell to host a delayed IPO later in the year. All three of Iraq’s mobile operators – which also include Kuwait-based Zain’s local unit and France Telecom affiliate Korek – are required to list 25% of their shares on the Iraq Stock Exchange (ISX) as part of their licensing conditions. All missed the August 2011 deadline, claiming the bourse was ill-equipped to handle the listings, however both Asiacell and Zain have said they are working toward staging IPOs this year.
Qtel and Asiacell will work with the Iraqi authorities to complete the transaction, according to the statement.
Zain’s 2011 annual report states it is Iraq’s largest mobile operator with a market share of 53%, while Qtel and Korek have shares of 38% and 9% respectively.
