Batelco’s Chairman, Shaikh Hamad bin Abdulla Al Khalifa announced on Sunday 25 March 2007, that Batelco is purchasing a 20% shareholding in Yemen’s leading mobile communications company SabaFon, for $144 million in cash. Batelco is purchasing this share directly from Shaikh Hameed Al Ahmar, SabaFon’s largest shareholder and Chairman. The Al Ahmar Group will remain SabaFon’s largest single shareholder.
Shaikh Hameed and Batelco Chairman Shaikh Hamad bin Abdulla Al Khalifa, signed a Sale and Purchase Agreement on 25 March 2007 and completion is expected within the next few days.
SabaFon is the largest GSM mobile operator in Yemen offering national coverage with over 500 base stations across Yemen and reached 1.2 million mobile subscribers at the end of February 2007. SabaFon started commercial operations in February 2001, focused on delivering innovation and value and, has grown to have the market leading share of approximately 40% of the Yemeni mobile market. SabaFon is a profitable and cash flow positive company after 5 years of operation in Yemen.
“Batelco has developed and is executing a niche growth strategy in the Middle East by focusing in areas of substantial growth from broadband and mobile operations. Our partnership with SabaFon is consistent with such strategy and provides the right kind of fit for Batelco’s future growth needs,” outlined Shaikh Hamad.
"This partnership reflects the strong relationship between Yemen and Bahrain and the rest of the Gulf States, and this has come about with the Yemeni efforts supported by the Gulf States to merge the Yemen economy with the economies of the GCC. It also further strengthens the Yemeni Bahraini relationship," stated Shaikh Hameed.
"We are also happy to enter into a partnership with Batelco which we preferred over other interested parties. We will definitely share our experiences in both companies to strengthen operations for future growth, with the ambition to target together other markets,” he added.
Batelco Chief Executive Peter Kaliaropoulos said that Batelco’s share in SabaFon will provide a significant entry into the rapidly growing market in Yemen that has a population of over 22 million and approximately 12% market penetration as of January 2007.
“Our involvement with SabaFon and the Al Ahmar Group will also allow us to target other adjacent markets for mobile services and boost Batelco’s strategic long term plans,” he said.
“SabaFon has an enthusiastic, energetic and competent team of employees led by experienced executives who thrive on creating a reliable and affordable service for its customers”, Mr. Kaliaropoulos continued to say.
“We want to support SabaFon to accelerate its growth through appropriate focus on the needs of the market segments and services they have chosen. We will collaborate and assist SabaFon across all areas including technology, purchasing, customer service and marketing,” he explained.
"SabaFon has succeeded in maintaining its leading position in the market during the previous years with its own management and we believe that partnering Batelco and leveraging their regional experience will bring SabaFon to a wider regional network and further strengthen its leading position in Yemen to create value for shareholders and customers," said SabaFon Chief Executive Officer Tarik Al-Haidary.
Batelco was advised in this acquisition by Millennium Finance Corporation which commented that, partnering with SabaFon will accelerate Batelco’s earnings growth and provides the potential to further enhance revenue growth and create substantial value for Batelco’s shareholders.
SabaFon was advised by Chescor Capital which commented that the transaction increases both parties competitiveness in an environment of increasing alliances and liberalisation.
Batelco plans to continue its regional expansion drive through targeted acquisitions of other operators and licences. “Whilst our origins are in Bahrain and we have to drive a “Customers First” strategy of continuous operational improvement in Bahrain, to deliver growth and dividends, we also have to tap into growing markets larger than Bahrain either directly or with partners,” Shaikh Hamad concluded.
