A day after Kuwait’s Zain Telecom approved the bid by Bharti Airtel, the Indian telecom operator on Monday said it has entered into exclusive talks with Zain for acquiring its African operations based on an enterprise value of $ 10.7 billion.
“Bharti Airtel Ltd and Zain have agreed to enter into exclusive discussions until March 25, 2010, for the acquisition of Zain’s African unit based on an enterprise value of $ 10.7 billion,” Bharti said in a statement.
This potential transaction does not include Zain’s operations in Morocco and Sudan.
In a statement to the Kuwait bourse on Sunday Zain said its board would meet to discuss an offer for its African assets, excluding Sudan and Morocco.
Bharti said the completion of the deal remains subject to due diligence, customary regulatory approvals and findings of the final transaction documentation.
This is Bharti’s third attempt in the last two years to enter the African market. Last year in September, Bharti’s talk with MTN for a $ 23—billion merger deal fell through due to various regulatory approvals, including dual listing.
“There can be no assurance that the transaction (current talks with Zain) would be consummated,” Bharti said.
Bharti has more than 110 million subscribers in India and has operations in Sri Lanka and Bangladesh outside of the country.
The company recently acquired a majority 70 per cent stake in Bangladesh’s Warid Telecom.
Under the agreement, Bharti Airtel will make a fresh investment of $ 300 million to expand Warid Telecom’s operations and will also have the management and board control of the company.
According to sources, Zain is estimated to have over 40 million subscribers in the African continent.
On Sunday the board of directors of Zain Group, formerly known as MTC, unanimously approved the sale of the Group’s assets in Africa to Bharti.
A consortium of Asian investors has for months been trying to buy Zain’s stakes estimated to be worth $ 13.7 billion from Kuwaiti family conglomerate Kharafi Group, which is one of the main shareholders in Zain.
In October last year, Zain halted talks to sell its African assets.