x Abu Dhabi, UAEFriday 21 July 2017

Etisalat failed to meet Zain due diligence deadline

Etisalat's Dh44 billion acquisition of a controlling stake in Zain takes another chapters after the UAE operator said has not received enough information from the Kuwaiti operator to complete its due diligence process before yesterday's deadline to close the deal.

Etisalat, the biggest telecommunications comapny in the UAE, missed yesterday's deadline to complete its Dh44 billion acquisition of a stake in Zain because it has not received enough information from the Kuwaiti to complete its due diligence process.

The UAE operator had until yesterday to sign a "definitive transaction" agreement with Zain shareholders that would give Etisalat a controlling stake in the Kuwaiti operator for 1.70 dinars a share.

However, that agreement was subject to completion of a due diligence process that began last October.

"The parties have not made sufficient progress towards completion of the proposed transaction in order to meet that deadline due to unforeseeable delays in Zain providing access to all relevant information which is required for Etisalat to complete its due diligence process," Etisalat said in a statement.

Etisalat said that it will continue to work towards an agreement but has not extended its deadline to sign a deal with Zain shareholders.

"The parties do continue to work towards the announcement of a definitive transaction," Etisalat said

The transaction would ultimately give Etisalat a 51 per cent controlling stake of the company worth 3.36bn Kuwaiti dinars (Dh43.68bn) and make the UAE operator the largest Middle Eastern telecoms firm with about 146 million subscribers.

Etisalat's delay in signing a deal may give more time for competing bids to develop and entice Zain shareholders.

Last week, it emerged with Cukurova Holding, a Turkish conglomerate, made a US$7.89 billion (Dh28.98bn) bid for a 29.9 per cent stake in Zain but the offer may not be legally bound as it was not posted on the Kuwait Stock Exchange.

dgeorgecosh@thenational.ae