Etisalat to conclude $11.7-bn Zain deal despite delay

UAE telecom operator Etisalat yesterday said that it  would continue with its proposed $11.7-billion deal to acquire a 46-per cent stake in Kuwait's Mobile Telecommunications Company Zain Telecom despite missing a 15 January due diligence deadline.

Abu Dhabi-based Etisalat said that it could not complete the due diligence in time due to ''unforeseen delays'' as Zain was unable to provide certain information required to complete the transaction.

However it said, "The parties do continue to work towards the announcement of a definitive transaction," and stakeholders would be informed about the progress "in due course."

In October 2010 Etisalat, the Middle East's largest telecom company, had offered to buy a 46-per cent stake in Zain for approximately $11.7 billion, in one of the largest deals in the region in recent history. (See: Etisalat offers $11.7 bln for 46 per cent stake in Kuwait's Zain)

Etisalat had said a month later that the deal would stand terminated if both companies failed to conclude a definite deal by 15 January.

But the conclusion of the deal is complicated since the transaction is subject to Zain hiving off its 25-per cent stake in Mobile Telecommunications Co of Saudi Arabia (Zain KSA) in a "timely fashion" and also because Shaikh Khalifa Ali Al Sabah, who holds 4.5 per cent stake in Zain, has opposed the deal and has initiated talks with Cukurova Holding, one of the largest shareholders of Turkey's Turkcell Iletisim Hizmetleri.