India's Bharti Airtel has finalised the GCC's biggest foreign acquisition deal, purchasing the African mobile networks of Zain, Kuwait's largest public company. Bharti will pay US$9 billion in cash for the networks, making the company Africa's second-largest mobile operator. It will take on US$1.7bn of Zain's debt as part of the deal, and become the fifth-largest mobile operator in the world. "This agreement is a landmark for the global telecom industry and game-changer for Bharti," said its chairman, Sunil Mittal.
"We are excited at the growth opportunities in Africa, the continent of hope and opportunity, and believe that the strength of our brand and the historical Indian connection with Africa, coupled with our unique business model, will allow us to unlock the potential of these emerging markets." The agreement comes after more than a year of uncertainty surrounding the future of Zain, which grew from a small Kuwaiti mobile operator to become one of the largest in the region with more than US$6bn in annual revenues and 71 million subscribers.
The company's long-running chief executive, Saad al-Barrak, resigned in February. People familiar with the company said Dr al Barrak's ambition to turn Zain into one of the world's 10 largest mobile operators conflicted with major shareholders, who preferred to sell its assets. Zain entered Africa in 2005 by acquiring CelTel, the regional operator founded by the Sudanese telecommunications tycoon Mohamed Ibrahim. The US$3.4bn purchase was the beginning of a five-year-long expansion spree on the continent, which has come to an end with the Bharti sale.
Zain's management have said a "substantial" portion of the proceeds of the sale would be distributed as a special dividend to shareholders. The company would focus more closely on its core Middle Eastern markets, its new chief executive, Nabil bin Salama, said in February. tgara@thenational.ae
