Kuwait's Mobile Telecommunications Company K.S.C. (the “Company”, “MTC”) announced Tuesday that it had entered into a binding agreement with the shareholders of Celtel International B.V. (“Celtel”) to acquire 100% of the issued capital of Celtel, the leading cellular operator in Sub-Saharan Africa.
MTC’s offer is structured to purchase 85% of the issued and outstanding shares of Celtel immediately for US$ 2.84 billion, with a commitment to purchase the remaining 15% of the shares within 24 months of the closing date for US$ 520 million.
Celtel will operate as a separate legal entity within the MTC Group of Companies. The existing Celtel management will remain in place, and continue to execute their ambitious growth plans for the business. Dr. Mohamed Ibrahim and Lord Cairns will stay on as directors of Celtel following the acquisition.
MTC will fund the acquisition through a combination of existing cash and newly raised debt. Financing for the transaction has been arranged by a group of four world-class financial institutions, with details to be announced in the coming weeks.
Commenting on the acquisition, Dr. Saad Al Barrak, MTC’s Vice Chairman and Managing Director, said “We are delighted with the acquisition of Celtel, an established telecommunications organisation with an internationally renowned pedigree in emerging markets in Sub-Saharan Africa. Celtel provides high quality mobile telephony services to countries with high growth potential, covering a total population of over 250 million. MTC recognises Celtel’s role not only as a provider of telecommunications services in these markets, but also as a good corporate citizen. Celtel is a key contributor to the economic development of the countries where it has a presence through foreign direct investment and job creation, which are cornerstones of an efficient and well-functioning market economy. Our acquisition of Celtel fulfils our strategic ambitions on three fronts. Firstly, it puts us firmly on target in the delivery of our 3x3x3 strategy of progressive development from regional to international to global telecom player in successive three year periods. Secondly, it provides us with the prime opportunity to participate in a wider social context in the growth and development of the economies of the African countries where Celtel has a presence. Finally, MTC, through the acquisition of Celtel, will have the largest regional footprint in the Middle East and Africa. Together, MTC and Celtel will leverage the strong synergies, shared cultural values and heritage which exist between the Arab World and Sub-Saharan Africa. We look forward to working with Celtel’s current management team in this regard.”
Bader Al Homaidhi, Director General of the Kuwait Fund for Economic Development said “I am pleased that MTC, one of Kuwait’s leading companies, has taken this unprecedented step of investing in the development and enhancement of telecommunications infrastructure and services in Sub-Saharan Africa. This significant milestone for both Africa and Kuwait complements the continuing efforts of the Kuwait Fund for Development in Africa.”
Dr. Mohamed Ibrahim, Chairman of Celtel said “In the past Celtel deployed European and American funds to assist the development of telecommunications infrastructure in Africa. Today, we are engaging the Middle East in this process. This transaction represents a key step in bringing these sources of wealth to support the development of Africa.”
Commenting on the transaction, Lord Cairns, Vice Chairman of Celtel said: “A new investor willing to make such a significant investment in Sub-Saharan Africa represents a message of great confidence in the future of the region. The successful history of Celtel thus far demonstrates what can be achieved through private sector investment adding value to shareholders, employees and service users.”
Celtel’s CEO, Marten Pieters, said “I look forward to working with my management team backed by the additional resources available from MTC. I am confident that, with our new partners, we have an exciting opportunity for our employees and customers to benefit from the full development of a vital service for emerging economies.”
UBS Investment Bank acted as exclusive financial adviser to MTC.
