Saudi/Italian JV wins TT stake with USD6.55 billion bid

4 Jul 2005

Oger Telecom, a consortium backed by Saudi Oger and Telecom Italia, has won a 55% stake in Turk Telekom, with a bid of USD6.55 billion. Koc Holding, Oger Telecom, Etisalat and Turkcell all submitted bidding proposals on June 24; Oger Telecom and Etisalat offered the highest amount of money and as a result were selected to go into the final round of negotiations. The bidding opened at USD5.9 billion, with Oger emerging as the winner after Etisalat dropped out at USD6.5 billion. The winning bid of USD6.55 billion exceeded all industry expectations, with analysts having predicted that the stake was worth between USD3.6 billion and USD4.2 billion.

The partnership between Saudi Oger and Telecom Italia will focus exclusively on the mobile business, while Oger Telecom will continue its cooperation in the fixed line arena with BT Teleconsult. On closing of the deal, Telecom Italia and Oger Telecom will sign a four year technical assistance agreement with TT&TIM (Avea), the Turkish wireless operator in which Telecom Italia Mobile and Turk Telekom each own 40%. Telecom Italia has initially put aside USD200 million for investment in the Turkish company. Under an agreement with Oger, Telecom Italia has the right to sell its stake in TT&TIM to Turk Telekom or to Oger.