Etisalat has signed an preliminary agreement with shareholders of Zain, Kuwait’s biggest phone operator, to acquire a 46% stake of the company, in a deal valued at about USD12 billion. The accord was made with Al-Khair, a company owned by Kuwait’s Kharafi Group, which is leading the stake sale. ‘Due diligence will begin in accordance with rules and regulations applicable by the company, and sale procedures will be executed in accordance with rules and regulations of the Kuwait Stock Exchange,’ a statement from Al-Khair read.
At the end of September Abu Dhabi-based Etisalat offered KWD1.7 (USD6.1) a share for the stake in Zain. On the basis of 4.3 billion Zain shares outstanding, the stake is valued at about USD12 billion based on current exchange rates. The deal will give Etisalat majority control of Zain and extend its reach in the Middle East. Kuwaiti daily newspaper al-Qabas reports that due diligence is expected to take about six weeks.