Omantel completes 12% stake buy in Zain
MUSCUT: Oman Telecommunications (Omantel) will pay $1.35 billion to buy a further 12.1 per cent stake in Kuwaiti telecoms company Zain in a deal that will expand its reach to nine Middle Eastern and North African countries.
It paid 0.781 Kuwaiti dinars ($2.58) per share, around 74 per cent above the current listed price, for the stake, which will take its total shareholding in Zain to 21.9 per cent. That will make it the second largest shareholder after Kuwait’s sovereign wealth fund, the Kuwait Investment Authority.
In an interview with Reuters, Omantel’s chief executive Marhoon al-mamari said combined savings of about $400 million over the next five years and synergies would bring the transaction price down.
“The multiples paid by Omantel are equivalent or less than those paid for a similar transaction in the region,” he said.
“This transaction will bring in scale. Prior to this transaction, Omantel was operating in a single market, namely Oman, and Zain Group operates in nine markets.”
Omantel purchased the stake from investment vehicles linked to Kuwait’s Al Kharafi merchant family, following its acquisition of a 9.8 per cent stake in Zain in August.
The purchase is aimed creating value for Omantel’s shareholders, diversifying its revenue sources and raising its regional scale, Omantel said in the bourse statement.