Zain sells African assets for US$10.7 billion

Zain has accepted an offer from India’s Bharti Airtel to purchase the African assets of the Kuwaiti telecoms operator for US$10.7 billion, reports The Times of India (TOI) according to sources familiar with the matter. The deal does not include Sudan or Morocco.

Zain posted a statement on its website on February 14, confirming it had received an offer and that its board of directors would be discussing the proposal at its board meeting on the same day. According to TOI’s sources, the Kuwait Investment Authority – which holds a 24.6 per cent stake in Zain, met on Sunday ahead of Zain’s board meeting and unanimously approved the transaction. It is believed the group’s shareholders also held talks with Bharti’s fellow Indian rival Reliance Communications.

Zain Africa, formerly branded Celtel, includes approximately 42 million subscribers and represents around 58 per cent of the operator’s customers as of end-September 2009. Bharti Airtel is India’s largest operator and has almost 125 million subscribers across India.

Zain’s CEO for the past seven years Saad Al Barrak resigned on February 3, prompted by frustration with unilateral shareholder action. Over the past six months, company shareholders led by the Kharafi Group held negotiations with a Malaysian-Indian consortium over the proposed sale of a 46 per cent stake in the Kuwait mobile operator group. The shareholders made it clear that the negotiations for the sale were taking place at shareholder level, with little-to-no input from Zain’s executive management. Kharafi Group, owned by one of the Middle East’s wealthiest families, holds 11 per cent in Zain.

Kuwait’s former minister of communication, Nabil Bin Salama, began his tenure as chief executive of the group commencing yesterday, replacing the outgoing Al Barrak.