Bharti Airtel, a global telecommunications provider, has finalised the purchase of Kuwaiti telecom operator Zain’s African assets, worth about $9 billion.
The deal makes Bharti Airtel the 5th largest telecom company in the world.
The final payment to Zain was made on 23 June 2011 to complete the acquisition of all the company’s African assets.
“This is huge because it means that across 15 countries Bharti is now able to streamline and start to really establish infrastructure on a massive scale,” says Barry Youlsen, a British analyst based in Algiers.
Youlsen is currently working on a consultancy project with the Algerian government aimed at finding new ways of attracting IT and telecom investment in the North African region.
“What Bharti is now able to do is arguably on an equal footing to MTN of South Africa so it will be exciting to see what is going to happen,” says Youlsen.
According to Zain, the company has received the final payment of USD $700 million from the sale of its African assets in accordance with the agreement of sale, in which the sum was to be paid one year after the initial transaction.
Last year, Bharti Airtel acquired Zain Telecom’s African operations for USD $10.7 billion to become the world’s 5th largest mobile operator with a total of 180 million subscribers in 18 nations across Asia and Africa.
According to Zain, the funds will further strengthen the company’s financial position although it must be noted that the amount was calculated as profits in the financial statements of the second quarter of 2010, and therefore will not have any effect on the financial statements for the current quarter of 2011.
By: Jonathan Terry