News, Telecoms

Omantel inks $1.35bn deal to acquire 12% stake in Kuwait’s Zain

Oman Telecommunications (Omantel) has announced it has won the bid to acquire 12.1% of the issued share capital in Mobile Telecommunications Company KSCP (Zain), making Omantel the second largest shareholder in Zain Group with a 21.9% stake. 

The acquisition between Omantel and Zain will create the third largest combined telecoms group in the MENA region, with 52 million customers.
The agreement between Omantel and Zain will create the third largest combined telecoms group in the MENA region, with 52 million customers.

The acquisition will be the third largest combined telecoms group in the MENA region, with 52 million customers.

Last month, Omantel entered into a share purchase agreement to acquire 521,975,416 million ordinary shares – representing 12.1% of the total fully paid, and issued share capital from Al Khair National for Stocks & Real Estate Company, Kuwaiti British Readymix Company, and Gulf National Holding Company for a total cash consideration of $1.35 billion.

This announcement triggered a formal public auction process under Boursa Kuwait rules, which has now been completed, marking the successful closing of the transaction.

The total equity value of the 21.9% shareholding equates to $2.19 billion, which includes the previously announced acquisition in August of 425.7 million treasury shares, representing 9.84% of the total fully paid and issued share capital.

“This is an historical moment for Omantel and Zain. Together, we have created a new regional telecoms group that will drive the digitisation of Oman and the wider region,” said Talal Said Marhoon Al Mamari, CEO, Omantel. “Our new scale and diversification will allow us to focus on digital transformation, to generate further revenue growth and accelerate the introduction of innovative products and services that will enable our region to digitise. We expect that the new group will enjoy a positive, long-term economic outlook and a robust base from which we can grow even further together. This is the right partnership to take our businesses to the next level and we are excited about our combined prospects within the exciting region in which we operate.”

Omantel has financed this transaction with acombination of long-term and bridge loan facilities. The bridge loan facility will subsequently be taken out through long-term capital markets instruments.

Credit Suisse acted as the firm’s exclusive financial adviser, and Freshfields Bruckhaus Deringer LLP as legal adviser to Omantel.

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