Thursday, April 1, 2010

Bharti And Zain Sign Sale Deal

Just a few days after the revelation that the board of Kuwait-based telecoms group Zain had approved an offer for its African assets, India’s Bharti Airtel has announced that it has entered into a legally binding agreement for the acquisition. Under the terms of the agreement Bharti will make a cash payment of USD9 billion, of which USD8.3 billion will be paid on closing of the deal; the remaining USD0.7 billion will be due one year after completion. Further, Bharti will assume USD1.7 billion of consolidated debt obligations as part of the deal, making it the second largest ever overseas acquisition by an Indian company, only topped by the USD12.9 billion Tata Steel paid for UK-based Corus Group in 2007.

Marking Bharti’s third attempt to enter the African markets, after two failed attempts to purchase South Africa’s MTN Group, when the deal closes the Indian company’s subscriber base will increase by approximately 42 million, spread across 15 countries: Burkina Faso, Chad, Congo Brazzaville, Democratic Republic of Congo, Gabon, Ghana, Niger, Kenya, Madagascar, Malawi, Nigeria, Sierra Leone, Tanzania, Uganda and Zambia. Zain’s Moroccan and Sudanese subsidiaries are, however, not included as part of the deal. Indian billionaire and Bharti’s chairman and founder, Sunil Mittal, said of the development: ‘With this acquisition, Bharti Airtel will be transformed into a truly global telecom company.’

Meanwhile, it was reported yesterday by Reuters that the government of Gabon may oppose the sale of Zain's Gabonese unit to Bharti. The state reportedly issued a statement saying that it disapproves of the transaction and 'reserves the right to take all necessary measures', adding that Zain Gabon has 'not complied' with local telecoms regulations.

1 comment:

Sourcing said...

Bharti Airtel has sunk in customer's confidnce in India, thanks to their "phony marketing" tactics,scant regard to the laws of land and a tampered billing system which would bill without customer's consent.

They have become too big for their shoes and they have outsourced everything to their vests and briefs!

BE it mobile or broadband or DTV, they offer "lip-service" at the start, dump unwanted goods on gullible customers.

Their fate in the mobile telephony will be known on July 1,2010 when Mobile number Portability(MNP) will be in operation!.

Already scores of customers, esp the older ones are leaving Airtel.

My only wish is that they behave properly in Africa, I do care for our life Mr.Sunil Mittal as our African brethren may not behave like Indians when cheated.