Etisalat’s international expansion strategy based upon solid foundations
ABU DHABI, United Arab Emirates, Wednesday, November 3rd 2010 [ME NewsWire]:
Etisalat Chairman regarding the Zain deal: “We will begin the Due Diligence process then present its results to the Etisalat Board of Directors to make a decision”
Etisalat today announced it has updated its proposal to acquire certain shares in Mobile Telecommunications Company LLC ("Zain") to provide that the offer is binding subject to a number of conditions. Consistent with our prior proposal, the updated proposal of KWD 1.7 per share is subject to a number of conditions, which include: the successful disposal by Zain of its entire interest in Zain KSA in a timely fashion; the negotiation of the definitive transaction documents; the completion of satisfactory due diligence; the receipt of all applicable regulatory approvals; and there being no material adverse change in Zain's business, financial, or regulatory affairs., as well as other customary conditions.
The number of shares to be acquired will represent 51% of Zain's total issued share capital and voting rights (excluding shares held in treasury but including all shares which may be issued pursuant to the exercise of any options).
In addition, our proposal will terminate unless the parties have entered into definitive transaction documents by 15 January 2011.
It is expected that our due diligence and other work required to reach definitive agreements, if successful, would take a number of weeks and, if signed, the transaction is unlikely to close before the end of first quarter of 2011.
The Chairman of Etisalat HE Mohammed Omran has said that, based upon preliminary studies, the Etisalat-Zain deal provides excellent integration into Etisalat’s operations, taking into consideration that Zain’s geographic footprint complements that of Etisalat to a large extent.
These are the markets of Sudan, Iraq, Kuwait, Jordan, Bahrain, Lebanon and Morocco.
In a press statement, he declared today: “Etisalat’s strategy is based upon sound and calculated foundations, one of the most important of which is expansion into regional and international growth markets which offer great opportunities to increase and diversify our sources of revenue. This is the strategic decision which has been affirmed by Etisalat’s Board of Directors.”
Omran added: “Our regional presence consolidates our position among the biggest international telecommunications companies and we believe that this deal will provide positive returns to Etisalat and added value to its shareholders”.
He noted that the telecommunications sector is a dynamic, fast developing one, which usually exceeds growth forecasts and expectations. “We must therefore keep pace with these developments to maintain our leading position”, Omran said.
On the progress of the deal, 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 necessary details. The results of this exercise will be presented to Etisalat’s Board of Directors to make the decision. It must be said here that Zain’s performance is good and the company enjoys an excellent reputation and has a highly qualified and professional staff.”
He added that the offer remains conditional until the process of Due Diligence in completed, hoping that the Due Diligence exercise into Zain and its subsidiary companies will be conducted during the next few weeks. The results of this exercise will be presented to the Etisalat Board of to take the necessary decisions.
Omran added that the timing of the deal is excellent especially because of the Gulf region’s very strong and robust economy, built upon sound foundations.
“The region enjoys outstanding and effective partnerships between the public and private sectors, a fact which mitigates investment risks to a large extent. Therefore I do believe that the timing is extremely apt, particularly with regards to operational and finance issues”, Omran said. “However, I must add that the issue of good timing is directly linked to the speed by which the experts can perform their duties in order for us to make decisions based upon sound, data driven foundations.”
About the positive aspects of the deal, Omran said: “Zain is a very well run company which occupies the pole position in many of the markets in which it operates, including Sudan, Iraq, Kuwait and Jordan. We will be able, through unifying our resources and integrating our networks, to provide our customers with a wide variety of added value services and world class products.
“We at the Board of Etisalat work within a clear and unified vision. As Chairman of the Board of Directors, I listen to the opinions of all Board members and discuss all details with them. I’m assisted in this work by a highly qualified and experienced executive team, which allows us to finalize the work within the right timeframe.
Etisalat’s Board of Directors has agreed to submit a conditional offer through AlKhair National for Stock and Real Estate Company, valued at KD 1.7 per share to purchase 51% of Zain's total issued share capital. Etisalat and Alkhair have agreed to enter into an exclusive discussion for a limited period of time.
Omran continued his statement by commending Al Khorafi Group as a highly reputable conglomerate which is considered to be an important pillar of the economy. “They command our total respect. We have worked with them with absolute transparency and clarity and they have been very reasonable and cooperative.”
“The UAE-Kuwait relationship is a shining example of brotherly relationships. Kuwait plays a vital role in the region, and we hope that inter-Gulf and inter-Arab economic relationships are strengthened through such partnerships which are based on professional foundations”, Omran said.
He added that Etisalat called upon the assistance of professional firms and teams of experts who worked side by side. The roles played by the National Bank of Kuwait, Morgan Stanley and Clifford Chance must also be noted.
- Ends -
For media enquiries, please contact:
Mr. Iyad Al Zoubi –
Senior Manager - International Media Relations, Etisalat
Tel: 02 6182173 -Fax: 02 6334448,
Email: ialzoubi@etisalat.ae
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