Vivendi to sell 53% Maroc Telecom stake to Etisalat for €4.2 bn
06 November 2013
French media and telecom group Vivendi SA has announced a definitive agreement with Abu Dhabi state telecoms company Emirates Telecommunications Corp (Etisalat Group) for the sale of its 53-per cent stake in North African phone operator Itisalat Al Maghrib or Maroc Telecom for €4.2 billion in cash.
On completion, the acquisition would be Etisalat's biggest in terms of buying into an existing operation.
The move would see Vivendi focus and strengthen its businesses around media and content activities after its proposal to spin off French wireless carrier SFR and the planned sale of its stake in video game publisher Activision Blizzard, Inc.
According to the company, the deal is subject to certain conditions, in particular, the approval from the regulatory authorities in the countries where Maroc Telecom operated.
Etisalat will pay Vivendi the cash value of 2012 dividend of €0.3 billion at the deal closing.
In July Etisalat had made a binding offer for the acquisition of Vivendi's Marco Telecom stake for €3.9 billion, and the exclusivity period for the deal had been extended by Vivendi in late September until 31 October.
Vivendi expects to complete the transaction by early 2014.
The Etisalat deal, and the proposed $8.2-billion transaction to sell its stake in Activision Blizzard, would help Vivendi to repay debt and transform itself into a smaller and better-valued media company.
With the completion of the two deals Vivendi would also be able to pursue a plan to spin off SFR, the company's biggest unit by revenue. The unit accounted for 40 per cent of Vivendi's 2012 revenue.
The Maroc stake sale and spin off of SFR would leave Vivendi as a smaller company, leaving it with its fast-growing media businesses comprising Universal Music Group and French pay-TV company Canal Plus.
It would also help Vivendi cut its net debt of €13.9 billion.
The takeover would see Etisalat gain control over the largest wireless carrier in Morocco, further consolidating its African operations that include Egypt and Nigeria.
Bloomberg quoted Shrouk Diab, an analyst at NBK Capital in Dubai, as saying the acquisition was positive for Etisalat given its strong presence in North Africa.
He added, if managed properly, Etisalat could derive a lot of cost synergies and revenue from the operations there.
Telecommunications companies in the gulf region are expanding in a bid to boost sales as their domestic markets face saturation.
Etisalat has operations in 15 countries in the Middle East, Africa and Asia, according to its website. In Africa, where it operates units in Sudan, Nigeria and Niger, its consolidated subscriber base increased 6 per cent to 12 million users during the first nine months of the year.