Two years since it first tried to reach out of India in a big way, Sunil Mittal?s Bharti Airtel on Thursday finally realised its dream by clinching the $10.7-billion deal with Zain Africa. With this, the company moves to become the world?s seventh-largest telecom operator by subscriber base from its current tenth position. However, the deal does not include Zain?s operations in Sudan and its investment in Morocco, which are facing ownership disputes.
The deal is the biggest outbound deal by an Indian company after Tata Steel acquired Anglo-Dutch steel producer Corus for around $13 billion. Overall, in the telecom sector, the deal ranks second after UK?s Vodafone acquired Hutch?s Indian mobile operations in 2007 at an enterprise valuation of $18 billion.
The combined subscriber base of the entity would be over 165 million with a total revenue base of close to $13 billion and presence across 20 countries. Interestingly, Bharti would now compete fiercely with South Africa?s MTN, which it had tried to acquire twice in the past. The final, formal announcement from the two sides came on Thursday, a day after the Zain board approved the deal and the expiry of the last date of exclusive talks between the two.
Bharti and Zain had entered into negotiations on February 15. In a late-evening statement, Bharti said: ?Further to our announcement regarding the acquisition of Zain Africa BV, we would like to report that the due diligence has been completed.
Bharti is now working with Zain towards finalizing the definitive agreements that will address all key terms and findings arising out of the due diligence. Definitive agreements are expected to be signed soon. Upon signing, the parties will move towards obtaining any required approvals?.
A Zain statement earlier in the day said: ?The board is pleased to report that the due diligence process has been completed and the parties are finalising definitive agreements, which are expected to be signed in the coming days?. Bharti has already secured funding for the entire $8.3 billion, which would be the immediate payout from its end.