Dubai: Emirates Telecommunications Corporation (etisalat), on Tuesday signed a share purchase agreement for the acquisition of Vivendi’s 53 per cent stake in Itissalat Al Maghrib (Maroc Telecom) for €4.2 billion in cash.
The cash transaction also includes 7.4 Moroccan dirhams per share paid by Maroc Telecom to the French company. The purchase will give the UAE telecom operator control over the largest carrier in Morocco.
“It is a perfect bit for etisalat and they are in the right direction. They can use their products and services which are highly acceptable in this part of the world. Africa is a prefect building ground for etisalat,” Bhanu Chaddha, senior telecom analyst at research firm International Data Corporation, told Gulf News.
Since the UAE market is getting saturated, he said etisalat needs to look at diversification. The international operations are now delivering the benefits for etisalat and that strategy is moving in the right direction.
Etisalat, which is present in 15 countries across the Middle East, Africa and Asia, recorded a revenue of Dh699 million from its Africa cluster in the third quarter, up one per cent in comparison to the same period last year.
“Going forward, it is more important for etisalat. The recent regulatory changes in the UAE are expected to increase the competitive dynamics. But etisalat is more carefully evaluating the market,” Chaddha said.
“Closing of the acquisition of Vivendi’s stake in Maroc Telecom by etisalat is subject to a number of conditions,” etisalat said in an emailed statement.
These include, among others, the execution of a shareholders’ agreement with the Kingdom of Morocco regarding Maroc Telecom, securing competition and regulatory and approvals in the Kingdom of Morocco and certain other relevant jurisdictions in Maroc Telecom’s footprint.
Maroc has minority stakes in other African markets — Burkina Faso, Gabon, Mali and Mauritania.
These are emerging markets and there are “opportunities for expansion. It is a long-term strategy,” he said.
Etisalat has a cash balance of Dh11.9 billion. Chaddha said the company still has cash in hand, more than the debt. So they can fund lot of cash into the deal which again is important for etisalat.
Etisalat has invested Dh184 million in the Africa cluster, mainly due to 2G and 3G network deployment in Ivory Coast, Benin and Togo.