Zain Takes Majority Stake in Palestinian Mobile Operator

Zain has announced that it is to take a majority stake in the Palestinian Telecommunications Company (Paltel) in a share swap deal. Zain will transfer its ownership of its Jordan subsidiary to Paltel in exchange for taking an equity shareholding of 56.53% in the enlarged company.

Through this transaction, Palestine will become the 24th territory in which Zain will have a commercial footprint. The mobile operation in Palestine currently known as ‘Jawwal' will be rebranded to Zain by the end of 2009.

Zain Palestine will also join Zain's 'One Network' which offers borderless roaming between Zain networks across Africa and the Middle-East.

The combination of both Zain Jordan and Paltel will produce a business group which will generate over US$1 billion of revenues, US$450 million in EBITDA and US$300 million in net income in 2009 alone. Additionally Zain says that it will result in significant synergies and efficiencies in CAPEX and OPEX spend and purchasing power.

"A merger of this nature, with immediate opportunities for synergies between the two leading operators in Jordan and Palestine, will create substantial value for shareholders and enable us to create a strong operating platform for our businesses in the Levant and beyond," said Dr. Saad Al-Barrak, Chief Executive Officer of Zain. "We have enduring faith in the Palestinian economy and are totally committed to future development of its telecom sector. This deal will play an instrumental role in supporting our 2011 ambitions of being a top-ten global mobile operator."

The transaction will close in Q2, 2009 subject to the approvals of Telecommunications and Securities market regulators in applicable jurisdictions.

Posted to the site on 18th May 2009