Etisalat’s talks with Vivendi to buy a 53 per cent stake in Maroc Telecom have been extended until the end of next month.
The UAE telecoms operator, which in July made a binding offer of €3.9 billion (Dh19.37bn) or Dh92.6 per share for the French conglomerate’s stake, needs the approval of Morocco’s government, which owns 30 per cent of Maroc Telecom.
The remaining 17 per cent of the telecoms company is publicly traded on the Casablanca Stock Exchange.
Vivendi had formally granted Etisalat a period of exclusivity until September 25 for the acquisition.
“Etisalat has extended the deadline for its offer by more than a month, which indicates that negotiations are proving to be more complicated than initially expected,” said Matthew Reed, the principal analyst at Informa Telecoms and Media.
“Apparently one sticking point is to do with the status of Etisalat’s other African subsidiaries; Etisalat wants these to be absorbed into Maroc Telecom, but the Moroccan government is less keen.”
The deal, Etisalat said, would be subject to a number of conditions. They include, among others, the execution of a shareholders’ agreement with Morocco regarding Maroc Telecom, and securing competition and regulatory approvals, according to Etisalat.
“We have agreed on all the main terms and a deal may be finalised in one to two months,” a Moroccan minister said earlier this month.
Etisalat, which entered negotiations with Vivendi to acquire the stake in April, was contending with Qatar’s Ooredoo.
The Qatari company eventually withdrew its bid in June because of the “lengthy” negotiations process.
Saudi Telecom Company, Britain’s Vodafone and Korea’s KT Corporation had all expressed an interest in the stake but did not submit bids.
“I’m still confident that Etisalat will be able to close the acquisition of Maroc Telecom shortly, as the extension of exclusivity is only for 36 days,” said Petr Molik, the chief financial officer and head of financial advisory at the Abu Dhabi-based investment bank Menacorp.
“In all probability there must be some minor point of disagreement in the shareholders agreement negotiations with the kingdom of Morocco.”
Vivendi is in the process of divesting several of its assets as part of a strategic review aimed at paying down debt, boosting its flagging share price and reducing its exposure to capital-intensive telecoms businesses.
“Given the size of the company, its international subsidiaries and the involvement of private companies, as well as the public authorities of France, Morocco and the UAE, such delays are not uncommon despite the best efforts of the respective financial and legal teams involved in the operation,” said Mr Molik.
Maroc Telecom offers fixed-line, mobile and internet services in Morocco and is one of Africa’s biggest telecoms firms, with units in Burkina Faso, Gabon, Mali and Mauritania.