Oman Telecommunications Company (Omantel) is to purchase a 9.84 per cent stake in Mobile Telecommunication Company (Zain) in a cash transaction worth 325.6 million rials, the company said in a statement.
The telecom major signed a deal to buy 425.7 million shares of the Kuwaiti telecom player at an offer price of 0.60 dinars per share, subject to regulatory approval, the company said.
The transaction positions Omantel as a leading digital service provider in the region. The acquisition is part of Omantel’s Corporate Strategy 3.0 and is in line with the strategic objective of diversifying exposure and positioning the business for future growth.
Martial Caratti, CFO, Omantel, said: “Acquiring a minority stake in Zain is a deliberate investment for Omantel as we position ourselves as a leading digital service provider. This is in line with our Corporate Strategy 3.0, launched in 2015. We have always emphasized that growth will come from continued diversification, and this acquisition positions Omantel for the future.”
Omantel will explore ways to cooperate in several key areas including the wholesale telecom business, operations and networks, commercial activities, and knowledge and experience sharing. It will also allow Omantel to gain exposure to nine growth markets with a total population of 175 million, and provide significant growth drivers across a range of services and applications.
The deal will improve profitability, leading to enhanced shareholder value. Omantel will explore options for cost synergies through operational cooperation and capital expenditure, the telecom firm said.
Zain is a high performing and innovative telecoms business with a complementary geographical footprint. It is the most advanced digital service provider in the Mena region with strong partnerships with leading technology players across the globe. It has a fast growing and lucrative portfolio of diversified services which includes data monetization, Enterprise,
fixed broadband/ FTTH services and smart city initiatives.
The two firms will look to collaborate on the wholesale telecom business, operations and networks, and commercial activities, according to the
Credit Suisse is acting as exclusive financial adviser and Freshfields Bruckhaus Deringer are acting as legal adviser to Omantel.