INDIA's Bharti Airtel Limited, which has offered around $10.7 billion for 15 of Kuwait-based Zain’s African units, is in talks with Tanzania’s government over its stake in Zain Tanzania.
“Tanzania’s government has a 40 percent stake in Zain Tanzania, and the government is keen to know the future” of the unit when Bharti becomes “the new majority shareholder” Finance and Economy Minister Mustafa Mkulo told Bloomberg in a telephone interview from Dodoma, the country’s capital.
The Republic of Congo said recently it retains the right to block the transfer of Zain’s licence to Bharti.
The Republic of Congo’s government was not consulted and this was a violation of the country’s laws, it said in a statement from the capital, Brazzaville.
The government of Gabon has also objected to the deal.
Negotiations are progressing, Mkulo said, declining to comment on the specifics of the discussions.
Indian telecommunications company Bharti Airtel and the Bahrain-based Zain group have signed definitive agreements for Bharti to buy most of Zain's operations in Africa at an enterprise value of $10.7 billion.
The deal, which was first announced in February, has moved very quickly from the drawing board to completion with due diligence and signing of definitive deal documentation, which happened in Amsterdam recently.
Bharti Airtel's planned acquisition of Zain's African mobile networks will make the Indian firm one of the five largest mobile groups in the world by subscriber connections, according to the latest Wireless Intelligence operator-group rankings.
The latest global rankings are based on fourth-quarter 2009 connections data and are calculated on a proforma basis to demonstrate the impact of the enlarged Airtel Group.
On this basis, the ranking reveals that Airtel – ranked eighth in last year's ranking - will overtake Norway's Telenor Group, Deutsche Telekom and China Unicom to become the world's fifth largest mobile operator group on just under 170 million global connections.
Airtel is to takeover Zain's mobile operations in 15 African countries: Burkina Faso, Chad, Congo, Democratic Republic of Congo, Gabon, Ghana, Kenya, Madagascar, Malawi, Niger, Nigeria, Sierra Leone, Tanzania, Uganda, and Zambia. According to Airtel, the 15 networks cover a total population of over 450 million with telecom penetration at approximately 32 percent.
As well as its home market of India, Airtel also launched in Sri Lanka in 2009 and acquired Warid Telecom in Bangladesh in January 2010, bringing its total to 18 markets, a global footprint surpassed only by the large European operator groups and its new African rival, MTN.
Based on Q4 2009 pro forma data, international (non-Indian) markets will account for around 30 percent of Airtel's total connections following completion of the Zain deal.
Airtel is to acquire the African networks in a deal worth $10.7 billion (which includes around $1.7 billion in debt), making it the second-largest African operator group behind MTN, which remains ranked at number twelve by global connections.
The two operators will compete in a number of key African markets, including the largest, Nigeria. Zain Nigeria – the country's third largest operator – will become Airtel's single largest subsidiary outside of India, accounting for about 35 percent of its international connections base.
Zain intends to sell all but two of its African mobile assets to Airtel, the exceptions being the wholly-owned Zain Sudan (a market leader in the country) and its 15.5 percent equity stake in Wana (ONA) in Morocco.
The divestiture means that Zain's global footprint will be reduced to just six markets and sees the Kuwaiti-based firm drop to number 46 in rankings on a pro forma basis. Zain ranked number 18 in a telecoms study last year and – prior to the African divestitures – had set itself the target of becoming a top ten global operator by 2011.