The much talked about $10 billion Zain take over by Vivendi has been halted, with French media giant, saying the deal was inconsistent with its financial criteria.
‘Vivendi has applied its usual criteria of profitability and financial discipline to this potential investment in emerging markets, in the best interest of its shareholders,” the company statement said.
Zain Group, the Kuwaiti based mobile telecommunication company with operations in 22 countries in Middle East and Africa, has been in negotiations with Vivendi for weeks now.
The sale would have marked another turning point in Kenya’s second largest and oldest mobile services provider’s colourful history. In Kenya Zain began life as Kenya Cellular Communications Ltd, or Kencell a joint venture between Vivendi of France and Sameer Investments of Kenya.
Sameer is controlled by Naushad N. Merali, one of Kenya’s wealthiest investors and former President Daniel Arap Moi.
At the time, the shareholding in Kencell was 40 percent for Vivendi and 60 percent for Sameer, in line with regulations of the Communications Commission of Kenya. Between 2000 and 2003, Kencell grew very fast due to its high quality voice and data network.
But poor revenue and high operational costs saw Kencell post huge losses in the period between 2003 and 2004. After the string of losses and stunted growth of the operator in 2005 Vivendi opted out of the venture selling off her 40 percent stake in Kencell to Celtel International.
The buyout saw the operator rebrand to Celtel Kenya.
Vivendi had aimed to boost its presence in Africa, where it already holds a 53% stake in Morocco’s Maroc Telecom. Zain has some 65 million subscribers in all, with 40 million across Africa.
