Omantel has unveiled its largest overseas investment to date, with a USD 846.1 million deal to acquire about 10% of the regional telecommunications group Zain.
Oman Telecommunications Company (Omantel) has announced a share purchase agreement whereby it will purchase 425.7 million treasury shares of Mobile Telecommunication Company (Zain Group) in a cash transaction at an offer price of KWD 0.60 per share – subject to regulatory approval.
Once complete, Omantel will own a minority stake in Zain Group of approximately 9.84% in outstanding common shares. The total consideration of the transaction is valued at USD 846.1 million (OMR 325.6 million).
Martial Caratti, Chief Financial Officer, said: “Acquiring a minority stake in Zain Group is a deliberate investment for Omantel as we position ourselves as a leading digital service provider. This is in line with our Corporate Strategy 3.0, launched in 2015. We have always emphasized that growth will come from continued diversification, and this acquisition positions the company for the future.”
Omantel will explore ways to cooperate in several key areas including the wholesale telecom business, operations and networks, commercial activities, and knowledge and experience sharing.
The acquisition will allow Omantel to gain exposure to nine growth markets with a total population of 175 million, and provide significant growth drivers across a range of services and applications. It will also improve profitability, leading to enhanced shareholder value.
Omantel will explore options for cost synergies through operational cooperation and capital expenditure.
Zain Group is a high performing and innovative telecoms business with a complementary geographical footprint. It is the most advanced digital service provider in the MENA region with strong partnerships with leading technology players across the globe. It has a fast growing and lucrative portfolio of diversified services which includes data magnetization, Enterprise (B2B), fixed broadband/ FTTH services and smart city initiatives.
Credit Suisse are acting as exclusive financial adviser and Freshfields Bruckhaus Deringer LLP are acting as legal adviser to Omantel.