Omantel completes acquisition of Zain stake for $2.19 billion

Oman Telecommunications SAOG (Omantel) has announced it has won the bid to acquire 12.1 per cent of the issued share capital in Mobile Telecommunications Company KSCP (Zain), making Omantel the second largest shareholder in Zain Group with a 21.9 per cent stake.
The acquisition creates a new digital telecom powerhouse capable of leading digital transformation across the MENA region. The new group will be the third largest combined telecoms group in the MENA region, with 52 million customers.
Talal Said Marhoon al Mamari, Chief Executive Officer, Omantel, commented: “This is an historical moment for Omantel and Zain. Together, we have created a new regional telecoms group that will drive the digitisation of Oman and the wider region. Our new scale and diversification will allow us to focus on digital transformation, to generate further revenue growth and accelerate the introduction of innovative products and services that will enable our region to digitise. We expect that the new group will enjoy a positive, long-term economic outlook and a robust base from which we can grow even further together. This is the right partnership to take our businesses to the next level and we are excited about our combined prospects within the exciting region in which we operate.”
On October 26, 2017, Omantel entered into a share purchase agreement (SPA) to acquire 521,975,416 million ordinary shares representing 12.1 per cent of the total fully paid and issued share capital from Al Khair National for Stocks & Real Estate Company WLL, Kuwaiti British Readymix Company WLL, and Gulf National Holding Company KSCC (collectively the ‘sellers’) for a total cash consideration of $1.35 billion.
This announcement triggered a formal public auction process under Boursa Kuwait rules, which was completed yesterday, marking the successful closing of the transaction. In addition, the Board of Directors of Zain is expected to be reconstituted.
The total equity value of the 21.9 per cent shareholding is $2.19 billion (RO 845 million). This includes the previously announced acquisition on August 24, 2017 of 425.7 million treasury shares representing 9.84 per cent of the total fully paid and issued share capital.
Omantel has financed this transaction with a combination of long-term and bridge loan facilities. The bridge loan facility will subsequently be taken out through long-term capital markets instruments.
Credit Suisse acted as exclusive financial adviser and Freshfields Bruckhaus Deringer LLP as legal adviser to Omantel. Credit Suisse and Citi are acting as Bookrunners, Mandated Lead Arrangers and Original Lenders; with Bank Muscat, HSBC and Standard Chartered Bank and Bank ABC as Bookrunners and Mandated Lead Arrangers in the acquisition financing.