The leading operator of the United Arab Emirates Etisalat WILL acquire a controlling stake in Zain after all. It’s not a rumor any more as the two parties have confirmed the talks.
It is said that the investment company controlled by the Kuwaiti Kharafi family (which is Zain’s main shareholder) has signed a preliminary agreement accepting Etisalat’s bid for 46% of Zain. And because 10% of Zain is held in treasury shares, Etisalat’s $11.7 billion offer is actually for 51% of the company.
However, there are some conditions that must be met in order for the sale to proceed. For instance, Zain will have to sell its Saudi unit as Etisalat already operates its own mobile business in the country – Mobily. Moreover, the completion of satisfactory due diligence is required. On that issue, Etisalat’s chairman Mohammad Omran said: “Matters are still at an early stage, and the information and data currently available to us are partial. Once the rigorous process of due diligence is completed, the picture will become clear and we will then be in full possession of the pertinent details.”
If all goes as planned, the two parties will enter into a definitive transaction by January 15th, 2011 creating a regional behemoth as a result…
[Via: MobileBusinessBriefing]