Bharti Airtel has offered $10.70 billion to buy Kuwait-based Zain Telecom’s mobile operations in Africa
India's largest telecom operator Bharti Airtel Ltd on Monday said that it has offered $10.70 billion (nearly Rs50,000 crore) to buy Kuwait-based Zain Telecom's mobile operations in Africa, in a deal that would catapult India's largest private telecom firm in the league of the world's top ten operators, reports PTI.
"Bharti and Zain have agreed to enter into exclusive discussions until 25 March 2010 for the acquisition of Zain's African unit based on an enterprise value of $10.7 billion," the company said in a statement.
Zain has operations in 17 African countries and Bharti's offer covers all of them except Sudan and Morocco.
Bharti Airtel, which claims a subscriber base of over 125 million in India, would make it to the top 10 operators globally after acquisition of Zain, which has nearly 42 million users in Africa.
"This potential transaction does not include Zain's operations in Morocco and Sudan and remains subject to due diligence, customary regulatory approvals and signing of final transaction documentation," Bharti said.
This is Bharti's third attempt in the last two years to enter the African market. In September last year, Bharti's $23-billion merger talks with MTN fell through for the second time due to various reasons including regulatory approvals.
Other than India, Bharti has operations in Sri Lanka and Bangladesh. Bharti had recently recast its top management and had created a separate unit headed by chief executive officer Manoj Kohli to look into overseas opportunities.
With tariffs touching rock bottom and entry of eight new mobile players, Bharti has been facing tough competition in the domestic market and was looking for opportunities in the overseas market to spread its footprint.
"There can be no assurance that a transaction will be consummated. Further announcements will be made in due course," Bharti said in a statement.
Yesterday, the board of directors of Zain Group, formerly known as MTC, unanimously approved the sale of the group's assets in Africa to Bharti.
A consortium of Asian investors has for months been trying to buy Zain's stakes estimated to be worth $13.70 billion from Kuwaiti family conglomerate Kharafi Group, which is one of the main shareholders in Zain. In October last year, Zain halted talks to sell its African assets.