Emirates Telecommunications Corporation (Etisalat) has confirmed that it intends to continue working towards securing a USD12 billion deal for a stake in Kuwait-based telecoms group Zain, despite that fact that a lack of information resulted in the two firms missing out on a long-standing 15 January due diligence deadline. An Etisalat press statement confirmed: ‘The parties have not made sufficient progress towards completion of the proposed transaction in order to meet that deadline due to unforeseeable delays in providing access to all relevant information which is required for Etisalat to complete its due diligence process’.
As reported in CommsUpdate in late September 2010, Abu Dhabi-based Etisalat offered KWD1.70 a share for a 46% stake in Zain, taking the total value of the transaction up to around USD12 billion. However, in November 2010 Etisalat raised concerns that its proposed deal with Zain could fall through if definitive transaction documents were not signed by 15 January, when it was scheduled to complete due diligence. Any deal between Etisalat and Zain is also dependent on the sale of Zain’s Saudi Arabian assets, for anti-trust reasons; Etisalat already owns a controlling stake in Saudi’s second-placed mobile operator Mobily and its broadband unit Bayanat Al-Oula. A new time frame within which due diligence must be concluded has yet to be announced.