Dhabi Group, Essar in Africa deal

Abu Dhabi/Mumbai: The Dhabi Group and the Essar Group on Monday announced the signing of definitive agreements for an investment by Essar Group into the telecom assets of the Dhabi Group in Uganda and Republic of Congo.

The agreements were signed by Shaikh Nahyan Bin Mubarak Al Nahyan, Chairman, on behalf of the Dhabi Group and Prashant Ruia, Group Chief Executive of the Essar Group, in Abu Dhabi. The enterprise valuation of the Uganda and Congo operations is collectively valued at $318 million (Dh1.17 billion).

The Essar Group has committed growth capital to both telecom operations to facilitate network expansion and marketing. Upon completion, the Essar Group will acquire a majority stake in both the assets. The partnership is also expected to bring operational efficiencies to the African operations.

Synergy

Shaikh Nahyan said: "We are pleased to join hands with a group that both complements and extends our synergies to expand further into Africa. Warid [Telecom] has expanded its greenfield operations to become credible competitors and challengers in the market where it operates — the time is now right for the next stage of its growth and evolution."

Ruia said: "Essar is delighted to partner with the Dhabi Group to expand Essar's telecom operations in Uganda and Congo. This is in line with Essar's plan to be a part of the growing telecom market in Africa. This transaction with the Dhabi Group augments our successful launch of telecom services in Kenya under the brand ‘yu' which was a stepping stone for Essar to expand its telecom footprint to the African continent."

Essar's investment in Warid Telecom in Africa represents a part of its strategic plans to grow its business in Africa.

This deal is a reflection of Essar's plans to increase its presence in the Middle East and Africa regions as it explores business opportunities by forging partnerships with prominent business groups.

Regarded as one of the fastest-growing telecom operators in Kenya, Essar Telecom Kenya has over 600,000 subscribers and expects this number to grow significantly as it completes its rollout across Kenya.