France-based media and telecom conglomerate Vivendi has formally interrupted talks to buy a controlling stake in Zain Africa.Vivendi has applied its usual criteria of profitability and financial discipline to this potential investment in emerging markets, in the best interests of its shareholders, read the statement posted on its website.
However Kuwaiti newspaper al-Qabas reported that Zain had rejected a bid from Vivendi to buy a 65 percent stake in Zain Africa for about $10.5 billion (about Sh800 billion).
Zain operates in 16 countries in Africa, Kenya included, and six in the Middle East. Zain Kenya is the second largest mobile company in Kenya, the others being Safaricom, Telkom Kenya and Essar Kenya.
Two weeks ago, Vivendi acknowledged it was in acquisition talks with the Kuwait-based Zain Group.
Not certain
However, it said this did not mean it was certain that it would buy the groups African operation.
Sources close to the deal had also intimated that the French giant was considering purchasing a majority stake of between 51 and 65 per cent in Zains Africa business.
Several firms had been linked to the buy out before it was confirmed that Vivendi was in direct negotiation talks. The new twist may yet see the other suitors make fresh bids for the Africa operation.
This is not be the first time Vivendi is showing an interest in Africas mobile telephony sector as it owned a 60 per cent stake in the same firm when it traded as KenCell.
It later sold it at $250 million (Sh19 billion) to Celtel International, which then sold its shares to Zain Group for $3.4 billion (about Sh260 billion) in March 2005.
Vivendi has presence in other African countries such as Mauritania (Mauritel), Burkina Faso (Onatel), Moroccos Maroc and Gabon (Gabon Telecom).
Depending on the directions the buy out talks take it may be the fourth time the Kenyan operation will be changing ownership.
Zain Group has set aside Sh150 billion to expand its service in Africa this year.
Daily Nation
Post published in: Economy