KUWAIT CITY - Kuwait's Mobile Telecommunications Co (MTC) said Tuesday it has bought 85 percent of Dutch Celtel International, which operates in 13 African countries, for 2.84 billion dollars.
MTC, the second-largest company on the Kuwait Stock Exchange, said the deal includes a pledge to buy the remaining 15 percent of Celtel for 520 million dollars within the next two years.
It is the largest deal by a Kuwaiti mobile company in a foreign market and will add 5.2 million new mobile phone users to MTC's subscriber base of 3.4 million in five countries in the Middle East.
Celtel will continue to operate as a separate legal entity within the MTC group and its management will be retained, the statement said.
Part of the financing of the deal has been arranged by a group of four banks, and the rest will be paid in cash, said the statement without providing details.
Geneva-based UBS Investment Bank acted as the exclusive financial advisor to MTC in the deal.
"We are delighted with the acquisition of Celtel, an established telecommunications organization with an internationally renowned pedigree in emerging markets in sub-Saharan Africa," MTC vice chairman and managing director Saad al-Barrak said in the statement.
"Celtel provides high quality mobile telephone services to countries with high potential growth, covering a total population of over 250 million."
Celtel operates in Burkina Faso, Chad, the Democratic Republic of Congo, Gabon, Kenya, Malawi, Niger, Republic of Congo, Sierra Leone, Tanzania, Uganda and Zambia.
It is also a strategic investor and co-manager of Mobitel, Sudan's leading mobile network, the statement said.
MTC, in which the state owns a 24 percent stake, operates in Kuwait, Jordan, Bahrain, Iraq and Lebanon and is the larger of Kuwait's two mobile phone providers.
Last month, Barrak announced that the company was planning to transform from a leading regional company to an international operator.
The deal "puts us firmly on target in the delivery of our ... strategy of progressive development from regional to international to a global telecom player," Barrak said.
With the acquisition, MTC, founded in 1983, will have the largest regional footprint among telecommunication companies in the Middle East and Africa, he said.
MTC's net profit rose 17.6 percent to 408 million dollars last year from 347 million dollars in 2003. It has a market capitalisation of seven billion dollars.
Celtel's net profits doubled in 2004 to 147 million dollars from 73 million.
03/29/2005 14:28 GMT