France Telecom made its first move to expand beyond its core European market yesterday, agreeing to buy 40% of Morocco’s second largest cellco Médi Télécom (Meditel).
The firm will pay €640 million for the stake, after agreeing a partnership with current shareholders CDG Group and FinanceCom, and aims to drive the operator into new sectors including mobile data, content and business-to-business applications, and prepare for an IPO in the short to medium term.
Boss Stéphane Richard said the acquisition “is the first concrete step in our new policy of expansion outside Europe, and contributes to our stated aim of doubling our revenues in Africa and the Middle-East over the next five years.
France Telecom said the price agreed for the 40% stake values Médi Télécom at €2.1 billion, however analysts told WSJ.com the figure is around €10 million less than the share is worth.
The French incumbent will look to increase its holding in the future, but any such deal could be another four years in the making, sources told FT.com.
Indeed, France Telecom said it won’t include Meditel in its accounts until fiscal 2015.
Richard revealed the firm would look to boost its presence in Africa in April, with investment of up to €7 billion to meet a goal of doubling revenues from emerging markets within the next five years.
Marc Renard, head of France Telecom’s African operations, said in July that the firm was eyeing up to five acquisitions in the market this year.