Etisalat, the leading telecoms operator in the United Arab Emirates, has succeeded in taking a majority interest in Kuwait’s Zain with an updated takeover offer. An investment company controlled by the Kuwaiti Kharafi family (Zain’s main shareholder) has signed a preliminary agreement accepting Etisalat’s bid for 46 percent of Zain. Given that 10 percent of Zain is held in treasury shares then Etisalat’s offer represents 51 percent of its issued share capital. The deal is worth US$11.7 billion.

The updated offer contains various conditions, including the sale of Zain’s Saudi unit as Etisalat already operates its own Saudi mobile business, Mobily. Another condition is the completion of satisfactory due diligence, a process which is due to start within the next few weeks. The offer will lapse unless the two parties have entered into a definitive transaction by 15 January 2011. “Matters are still at an early stage, and the information and data currently available to us are partial. Once the rigorous process of due diligence is completed, the picture will become clear and we will then be in full possession of the pertinent details,” said Mohammad Omran, Etisalat’s chairman. He also pointed out how Zain’s geographic footprint generally complement those of Etisalat.