Zain accepts offer for Saudi operation

Batelco this morning announced that the Kingdom Holding Company/Batelco consortium’s joint bid to acquire Zain Kuwait’s 25 per cent stake in Zain Saudi Arabia, has been accepted by the Zain board. The Kingdom/Batelco consortium’s offer is non-binding, based on US$950 million in cash and subject to the findings of the due diligence exercise and other approvals which could take at least six weeks. The consortium’s offer does not include undertakings for the assumption of US$3.8 billion of Zain Saudi’s debt.

The successful exit of Zain Kuwait from its operation in Saudi Arabia would remove the main obstacle remaining for the acquisition of Zain Kuwait by Etisalat. That deal could not be ratified earlier in the year as Etisalat’s overlapping exposure in Mobily in Saudi Arabia prevented it from moving forward with its acquisition of a 46 per cent stake in Zain Kuwait, until the latter operator was able to exit its Saudi operation; a process that now appears underway given the acceptance of the Kingdom-Batelco offer.

As reported by Comm. yesterday, Batelco Group CEO Peter Kaliaropoulos described his company’s position in the joint venture as that of “technical partner”, and at this time it is unclear whether Batelco is participating in the consortium as just a technical partner, or whether it will participate in the equity as well.