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Etisalat sells $650m in assets as it completes $5.8bn Maroc acquisition

By GAR staff on 06.05.2014.

Emirates Telecommunications (Etisalat), the UAE’s most valuable publicly-traded company, has agreed to sell its businesses in six West African countries to Maroc Telecom to combine its in-country assets as it completes the $5.8bn acquisition of the firm from Vivendi SA.

The deal includes $650m in assets, spread across units that provide mobile voice and data services in Benin, the Central African Republic, Gabon, Niger and Togo and Prestige Telecom in the Côte D’Ivoire, which provides IT services for Etisalat operations in these countries.

“It really does makes sense: Maroc Telecom can manage the operations better out of Casablanca than Etisalat can out of the UAE.”

“It really makes sense they’re doing this,” Sanyalaksna Manibhandu, an analyst at NBAD Securities in Abu Dhabi, told Bloomburg Business Week. “They obviously think Maroc Telecom can manage [the assets] better out of Casablanca than they can out of the UAE.”

Etisalat agreed to acquire Vivendi’s 53% stake in Maroc Telecom in November, in the Middle East’s largest takeover of a phone carrier. Maroc’s established range of operations includes Morocco, Mauritania, Burkina Faso, Mali and Gabon, while Etisalat also exists in Egypt and Nigeria.

Last month, Etisalat signed a $4.4bndeal with 17 banks to help fund the Maroc acquisition, and the transaction will be completed this month, according to Etisalat CFO Serkan Okandan.

“The final step now would be to announce the closure of the Maroc Telecom transaction, and they are on course.” continued NBAD’s Manibhandu, who gave an “accumulate” recommendation on the stock, with a target price of 13.50 dirhams.

In Africa, Etisalat’s revenue declined by 1% to $191m in the first quarter of 2014 as a result of intensifying competition in the Ivory Coast and currency devaluation in Sudan.