Zain/Paltel deal scuppered

Zain has issued a statement confirming that the merger agreement between Zain and Paltel announced earlier this year will not take place, because Zain did not receive the required government approvals that were a condition precedent to concluding the deal.

In May, Zain and Paltel signed an agreement for a share-for-share exchange, which was to see Zain take a majority interest in Paltel with an equity shareholding of 56.53 per cent in exchange for Paltel owning 100 per cent of Zain Jordan. Paltel was a publicly-listed entity on the Palestinian Stock Exchange and Abu Dhabi Securities Exchange. The merger would have set the current Paltel shareholders’ equity position in both Paltel and its newly acquired subsidiary, Zain Jordan at 41.43 per cent.

Samir Heleila, a Paltel board member, told the Palestinian news agency Ma’an that the dispute was based on conditions the Jordanian finance ministry had set for Zain and a refusal by Mahmoud Abbas, the president of the Palestinian National Authority, to approve the deal.

The merger was expected to generate more than US$1 billion in annual revenues and an estimated US$300 million in net income this year, Zain executives estimated.

Paltel owns and operates Jawwal, a mobile network with more than 1.5 million subscribers in the West Bank and Gaza Strip.