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Omantel spends USD 846mn on Zain stake
Posted on Thursday, 10 August 2017 08:30
Oman Telecommunication (Omantel) is acquiring almost 10.0 per cent of Zain Group for USD 846.10 million, just days after Kuwait's largest telecom operator by subscribers reported second-quarter results.

The sultanate’s first integrated digital and mobile services provider will buy 425.70 million treasury shares – representing a 9.8 per cent stake – at a price of KWD 0.60 (USD 1.98) per share as part of an ongoing strategy launched in 2015.

It is making the investment in order to position itself to take advantage of opportunities in the region – the deal opens up cooperation across core business functions such as wholesale telecom activities, operations and networks.

By gaining exposure to nine markets with a total population of 175.00 million, Omantel will be able to access growth drivers across a range of services and applications.

Zain started out as the region’s first mobile operator in the 1980s and today operates under the Zain banner in eight countries, including Bahrain, Iraq, Sudan and South Sudan, and in Lebanon as touch, under a management contract.

In the first six months of 2017, the company generated revenues of KWD 508.00 million and earnings before interest, tax, depreciation and amortisation of KWD 212.00 million, reflecting a margin of 41.7 per cent.

Zain provided mobile voice and data services to over 45.20 million active customers, as of 30th June 2017, and posted net profit of KWD 82.00 million.

According to Zephyr, the M&A database published by Bureau van Dijk, the minority stake investment is one of the largest mergers and acquisitions by value announced by a Middle East company so far this calendar year.

In terms of targets operating in the communications sector in the region, the completed purchase of a 51.0 per cent stake in Omantel by United Telecommunication Investment & Projects is the biggest at USD 1.30 billion.

© Zephus Ltd