France Telecom (FT) Orange is looking to spend €1.5 billion to increase its holding in Mobinil, Egypt's largest mobile operator by revenue.
The French operator has reached a preliminary agreement to acquire most of billionaire Naguib Sawiris's shareholding in their Mobinil joint venture as part of its efforts to focus on fast-growing emerging markets. FT Orange already owns around 71 per cent of Mobinil Telecom, the holding company for Mobinil, while Orascom Telecom Media and Technology (OTMT), which is owned by Sawiris, owns the remainder. FT Orange says it will delist the company if the deal does ahead.
Commenting on the proposed acquisition, Tarkan Cinar, an analyst at WestLB, told Bloomberg: "In the long run, Africa should be an interesting story. In the short term there is a risk of extra capex, because we don't know what investments France Telecom will have to make in Egypt to renew any damaged infrastructure."
However, aacording to the Financial Times, FT orange will leave a 5 per cent holding in Mobinil with Sawiris, who will continue to act as FT's local partner in Egypt. OTMT would also be retained to manage the business and keep a similar number of board seats and similar voting rights.
Separately, the Egyptian stock market has launched an investigation into possible insider trading prior to the announcement of FT Orange's Mobinil bid.
For more:
- see this Bloomberg article
- see this Financial Times article (reg. req.)
- see this IT News article
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