The UAE's Etisalat is angling to buy a controlling stake in Kuwaiti telco Zain, in what would be one of the largest M&A deals in the Gulf to-date.
Etisalat is in direct talks with shareholders that own a combined 46% of Zain, which would give it a controlling majority as about 10% of Zain's shares are held as treasury stock, sources told Bloomberg.
The shareholders are thought to include the Kharafi family, who hold nearly a quarter of the company and other associated investors, FT.com said.
Etisalat has offered 1.7 Kuwaiti dinars (€4.38) per share. The value of the entire 46% stake has been reported as between $10.5 billion (€7.7 billion) and $12 billion.
In separate statements, Etisalat has confirmed it made a conditional offer while Zain's board said it was not aware of a deal, meaning Etisalat took the deal directly to shareholders.
Etisalat has more than 100 million customers across 18 countries in the Middle East, Africa and Asia, but it derives around 85% of its income from its UAE operations, and wants to reduce its reliance on the increasingly saturated market.
Zain has operations in eight countries in the Middle East, and a customer base of around 34.2 million.
Etisalat is also rumored to be negotiating a stake in Indian operator Reliance Communications, but a deal has not materialized so far.
Shares in Zain swelled 7.9% yesterday to 1.36 dinar on the news. Etisalat shares are up 0.93% to 10.75 dirham.
Gulf telecom carriers have spent more than $33 billion on acquisitions since 2006, business analytics firm Dealogic estimates.