New Delhi: India's Bharti Airtel has completed its $9 billion (Dh33 billion) acquisition of African operations from Kuwait's Zain, in a deal that would make the Indian firm the world's No. 5 wireless carrier by subscribers.
In March, Bharti struck a deal to buy the Kuwait firm's mobile operations in 15 African countries, in India's second biggest overseas acquisition after Tata Steel's $13 billion buy of Corus in 2007.
The Indian telecom market leader is facing ferocious competition at home and betting on opportunities in Africa are worth the risks of operating there even as some regard the total deal value of $10.7 billion — including assumption of $1.7 billion debt — as a full price Bharti is paying.
The deal, which would lift the company's subscriber base to 180 million from 18 countries, brings tough financial and management challenges.
Bharti, which is 32 per cent owned by Singapore Telecommunications Ltd, selected Zain as its second choice for building a major presence in Africa after it twice failed to finalise tie-ups with South Africa's MTN Group Ltd, the continent's biggest operator.
The deal had run into hurdles after the government of the small central African nation of Gabon had come out against the deal, but later approved the sale. The government of Congo Republic had also said Bharti-Zain deal broke law.
Under the terms of the deal, Bharti had to pay $8.3 billion to Zain in the first tranche, and the remainder after one year from the closing.
Bharti had secured debt of up to $8.5 billion from a clutch of lenders to fund the deal.
