New Delhi, June 8 (IANS) India’s top telecom player Bharti Airtel Tuesday said it has successfully concluded a $10.7-billion deal to acquire the African assets of Kuwait’s Zain, making it the world’s fifth largest mobile phone services company.
This is also the largest overseas acquisition of assets in Africa by an Indian company, even though it does not cover the Kuwaiti company’s operations in Sudan and Morocco, the company said in a statement.
‘Bharti is now among the five largest mobile operators in the world. This will further strengthen the historic Indo-Africa economic and social ties and provide a big boost to South-South cooperation,’ said group chairman Sunil Mittal.
He also said that the deal would create many more opportunities for Indian companies. ‘Telecom infrastructure firms will flock to Africa along with us,’ said the 52-year-old, first-generation entrepreneur, who runs the group with brothers Rakesh and Rajan.
The total customer base of Bharti now stands at over 180 million in 18 countries. Prior to the deal, Bharti had operations in India, Sri Lanka and Bangladesh.
This was Bharti’s third attempt to enter the largely untapped African market after the failure of merger pacts with South African telecom major MTN on two occasions. Africa accounts for a little over 60 percent of Zain’s 71.8 million customers.
The shares of Bharti Airtel, however, were 3.77 percent down at Rs.257.80 on the Bombay Stock Exchange (BSE).
The African countries in which assets have been acquired are Burkina Faso, Chad, Congo Brazzaville, Democratic Republic of Congo, Gabon, Ghana, Kenya, Madagascar, Malawi, Niger, Nigeria, Sierra Leone, Tanzania, Uganda and Zambia.
According to the Bharti statement, the acquired company is the market leader in 10 of the 15 African countries it operated in and second in four others. Chief executive Manoj Kohli will head these operations, based out of Nairobi.
Zain was paid $9 billion in cash for the deal, apart from transferring a debt of $1.7 billion. Of this, Bharti raised over $8.3 billion in debt to finance the acquisition, sources familiar with the development said.
As on Thursday, Bharti has paid the Kuwaiti promoters $7.868 billion in cash and over the next six months, another $400 million will be paid based on the two firms reaching some unspecified milestones being achieved.
The balance of $700 million is due one year from completion as per the original agreements signed on March 30.
Earlier this year, Bharti Airtel, which has been on the lookout for an overseas acquisition for over two years, had acquired a 70-percent controlling stake in the Bangladesh-based Warid Telecom to expand its global footprint.
Apart from telecom, the group has interests in retailing with the US-based Wal-Mart, food processing with the Philippines-based Del Monte and insurance with France-based Axa.