Vivendi confirms interest in Zain’s African assets

France-based media and telecom conglomerate Vivendi has formally confirmed it is holding talks to buy a controlling stake in Zain’s African mobile phone businesses.

In a statement Vivendi confirmed its interest in acquiring a majority stake in the Zain group’s telecommunications activities in Africa, in line with its strategy of seeking growth opportunities in emerging countries. The company said this acquisition would enable Vivendi to capitalise on its experience of developing mobile telephony in Africa, but at this stage there is no certainty that the discussions currently in progress will lead to a successful outcome.

In any event, Vivendi said it will examine this investment according to its usual profitability criteria and will adhere strictly to its usual principles of financial discipline. Meanwhile, the Financial Times cited sources close to the negotiations that Vivendi made an informal offer to Zain, which valued the African assets at US$10 billion-US$11 billion. The sources claim that the French media and telecoms company was considering purchasing a majority stake in Zain’s African businesses of between 51 and 65 per cent. Zain has mobile operations in 15 African countries having acquired Celtel, for US$3.4 billion in 2005.