Emirates Telecommunications Corporation, better known as Etisalat, has submitted a preliminary conditional offer to buy a 46 percent stake in Kuwaiti mobile telecommunications operator Zain, for $12 billion.
The Abu Dhabi-based Etisalat said it has offered 1.7 Kuwaiti dinars (around $6) per share for Zain, whose major shareholders include the Kuwait Investment Authority (Kuwait's sovereign wealth fund) and the conglomerate Kharafi Group.
Ahmed Bin Ali, Etisalat’s group senior vice president for corporate communication told state news agency WAM that no final agreement had been reached as the offer depended on the fulfillment of specific requirements and conditions.
Reuters reported earlier today, however, that the head of the Kharafi Group had said that the Etisalat offer was “suitable and good for both parties”. Nasser Al Kharafi told a local newspaper that he welcomed the offer and said minority shareholders, who fear they would be cut out of any deal between a large stakeholder and a bidder, would be protected.
Kharafi Group is active in virtually every sector of the Kuwaiti economy, with interests in engineering and construction, agribusiness and food industries, finance and banking, manufacturing and industry, real estate, infrastructure, tourism, leisure, and hospitality.
It has been hit hard by the global financial crisis and a property slump in Kuwait, however, and has been keen to offload its share of Zain for some time.
Etisalat operates in 18 countries across the Middle East, Asia and Africa, with over 100 million customers, and has been seeking seek growth in and around the MENA (Middle East and North Africa) region. A deal with Zain would give it access to markets in Iraq and Morocco, in which it has no current presence.
Zain has been described as a prime target for an acquisition after it sold 14 of its Africa assets to India's Bharti Airtel in a deal valued at $10.7 billion.
