Zain Still Interested in South Africa - in Talks with Indian Operators

In an interview, Zain CEO Saad al-Barrak has again restated his desire for the company to enter the South African market - and also not ruled out the possibility that the company could itself become an acquisition target.

Speaking to the Business Day newspaper, he said: "Our immediate plans are to expand in Africa, the Middle East and Asia. These are the emerging markets, the most needy markets, the most lucrative markets and highest growth markets." He confirmed that the company is keen to enter the South African market as soon as possible. There has been much speculation about a possible bid for South Africa's newest mobile operator, Cell C - which is 75% owned by Dubai-based Oger Telecom, although Zain has previously refused to comment on such a bid.

The company is also eyeing opportunities in India, "With mergers and acquisitions you have to be clandestine - as we speak we are considering two or three merger and acquisition opportunities."

Barrak also confirmed that while he is not adverse to a takeover bid for Zain, any buyer would have to have very deep pockets. The company is currently valued at around US$30 billion - so a takeover would probably need to pay at least US$40 billion for the company.

"ThatÃ's not to say we are not acquirable - in fact we welcome anyone who would like to acquire us, but it will not be easy." he concluded.

Zain is also looking to raise US$5 billion through a stock market listing in a - currently unspecified - European stock exchange and has previously said that it will use the proceeds to acquire operators in three more African countries within a year.

Considering how much money the company is seeking to raise from the IPO, along with its already deep pockets - speculation about entering the Egyptian market which is rich and also sits right next to Zain's contiguous roaming network would not be unreasonable. If such a move occurred, the most likely target would be MobiNil, which is listed on the Cairo stock exchange (29%) - and has two main shareholders, Orascom Telecom (33.1%) and France Telecom (36.3%). There have been strained relations between Orascom and France Telecom, with the latter initiating legal action against FT last December due to disagreement over the strategy of the company.

On the web: Business Day

Posted to the site on 5th August 2008