By IANS,
New Delhi: It has proved to be third time lucky for India’s leading telecom operator Bharti Airtel in clinching a major overseas acquisition.
With barely 24 hours left for its exclusive talks with Kuwait’s Zain Telecom to acquire their African unit, sources close to the development Wednesday said the boards of both the companies have now given their consent to the $10.7 billion deal.
“The deal will be signed in a day or two,” said a source, adding that it does not include Zain’s assets in Sudan and Morocco.
Bharti Airtel had announced Sunday it had tied up the whole financing requirement of $8.3 billion debt for the acquisition.
“The financing was over-subscribed with major international banks committing to underwrite the total amount,” the company had said in a statement.
Bharti would pay $9 billion to acquire Zain’s assets spread across 15 African countries. It will adopt $1.7 billion of Zain’s debt.
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.