Bharti falls for Africa again, woos Zain with $10.7 bn

NEW DELHI: Bharti Airtel, twice thwarted in its attempts to seal a deal aimed at catapulting it to the high table of global telecom operators, has made a fresh attempt at an overseas acquisition by offering to buy the African assets of Kuwaiti telecom firm Zain, reports, and people familiar with the matter said.

India’s top telecom company has offered to pay $10.7 billion (Rs 49,700 crore) for these assets and Zain’s board is expected to meet soon to discuss the offer, Kuwaiti daily al-Rai said on Saturday.

Bharti officials were not available for comment and the Zain group’s media manager said he was not aware of such a development, but two bankers familiar with the matter confirmed Bharti’s interest.

With talk of Zain’s sale reviving, the company’s share price on the Kuwait Stock Exchange has risen by more than a fifth to 1.08 dinar in about a week, giving it a market value of $16.2 billion. Last week, Zain said in a statement to the Kuwaiti bourse that it has not received any offers for the sale of its Africa assets.



One of the bankers told SundayET that Zain has grouped its African telecom investments in a subsidiary, which is up for sale. This person also identified China Mobile and Vivendi as rival suitors for Zain’s African assets, which include operations in 15 countries, with a little over 40 million customers. Zain also has a presence in 8 West Asian countries and a total of 70 million users.

In recent months, Zain has been linked to a long list of potential suitors, including Reliance Communications, France Telecom, the UAE’s Etisalat as well as an Indo-Malaysian consortium led by the little-known Vavasi group.

Bharti Airtel has also been spoken of as a potential buyer but company officials have declined to confirm interest in Zain, only saying India’s largest phone firm is keen on expanding its presence in emerging markets. State-owned BSNL and MTNL, which were in negotiations to join the Indo-Malaysian consortium to buy a 46% stake in Zain at 2 dinars per share, appeared to have backed out.

In July last year, French media conglomerate Vivendi called off discussions to buy Zain’s African assets. Kuwait’s sovereign wealth fund, the Kuwait Investment Authority, is the biggest shareholder in Zain, owning nearly quarter of its equity.

Last month, Bharti Airtel made its first overseas acquisition by buying a controlling stake in Bangladesh’s fourth biggest mobile phone operator Warid Telecom and its executives said that the move signalled a new strategy of scaling up globally through a string of small and medium-sized acquisitions in developing economies.

Bharti Airtel’s dreams of forging a transnational alliance with Africa’s largest telco MTN were shattered for the second time in less than two years in September.