Emirates Telecommunications Has Funds for Meditel Buyout
Etisalat eyeing an acquisition in Moroccan telco Meditel
Emirates Telecommunications (Etisalat) recently announced that it has enough funds to acquire Morocco's second-largest carrier Meditel, citing bankers close to the deal. Other bidders include companies like Oger Telecom, controlled by the Saudi Oger Group, Qatar Telecommunications (Qtel). According to Reuters, confirmed bids are due by September 14. A decision should be known at the end of September.
Bottom line: From a strategic standpoint, this makes complete sense for Emirates Telecommunications (Etisalat), the largest carrier of international voice traffic in Africa and the Middle East, and the 12th largest voice carrier in the world, reaching 74 million subs globally. This would perfectly complement its strategy in Africa, where it already made strategic investments in Egypt, Ivory Coast, Niger, Nigeria, Sudan, Tanzania, Togo, Central African Republic, Benin, and Burkina Faso.
Through this deal, Etisalat would make inroad in Morocco, one of the fastest growing wireless market in North Africa, with 25 Million wireless subs in 2008, and Africa in general. Meditel, the second largest carrier in Morocco with ~8 million wireless subs in 2008, has gained good traction over the years. Today, the carrier offers a fairly wide range of wireless technologies from GSM, GPRS, WIMAX, to HSUPA. Meditel is one of the largest employers in Morocco, as it employs ~1000 people directly and more than 12 000 indirectly. Of note, Meditel is owned by five shareholders: Portugal Telecom (32.18%), Telefonica (32.18%), FinanceCom (18.06%), a leading Moroccan financial institution, and the HoldCo Group, a Moroccan industrial group (17.59%).
Through this deal, Etisalat would then have a strong presence in two of the largest wireless markets in North Africa (Morocco and Egypt). Moving forward, it would also make sense for Etisalat to expand its presence in Algeria or Tunisia, which have also become key wireless markets in North Africa. While the bidding war is set to be rough between Etisalat, Oger Telecom and Qtel, we believe that Etisalat has a good chance to win the deal based on its proven track record, and established presence in the African region.
Lastly, this potential deal once again demonstrates the growing interest from Middle Eastern companies for the African region as this region presents significant revenue opportunities for many of those companies.
Julien Blin
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