India's Bharti Airtel has entered into talks with Kuwaiti-based Zain Telecom about buying its African mobile unit for around $10.7 billion (€7.9 billion).
The two companies will hold “exclusive discussions” on the acquisition until 25 March 2010, Bhart said in a statement Monday.
If successful the bid for Zain Africa BV - excluding Zain’s Morocco and Sudan units – would add another 70 million mobile users to Bharti Airtel’s footprint.
Zain confirmed in a statement on Saturday that it had received “an offer in relation to its operations in Africa excluding Morocco and Sudan.”
Kuwaiti newspaper Al Rai on Saturday reported that Bharti Airtel had bid $10.7 billion for the former pan-African networks of Celtel – acquired by Zain for just $3.4 billion in 2005.
For Bharti, securing mobile operations in fast growing Africa is key to its growth strategy as growth slows in its home market. It has twice failed in its attempts to merge with South African behemoth MTN in the past two years.
Zain has been trying to sell its African networks for more than 12 months. Alternatively, the firm was looking at taking on a strategic investor.
Last week, Zain’s CEO Saad Al Barrak resigned amid controversy with the firm’s largest shareholder the Kharafi Group.
The Kharafi Group last year reportedly signed a preliminary deal with a consortium, led by Delhi-based property group Vavasi, which was angling for up to a 46% stake in Zain.
The consortium was believed to be trying to get China Mobile to join it in its bid for Zain.