Kuwait-based Zain Group confirmed Oman Telecommunications (Omantel) acquired a 9.84 per cent stake for $846 million, and said it will use the funds to reduce debt levels, increase shareholder equity and upgrade its networks.

In a statement, Zain explained the two had entered into a share purchase agreement for Zain’s treasury shares on 10 August, which “triggered a formal block trade auction process under Boursa Kuwait rules”, the country’s stock exchange.

Bader Al-Kharafi, Zain vice chairman and Group CEO, said: “We look forward to exploring mutually beneficial synergies and business enhancing opportunities across the region.”

“The strategic visions of both Zain and Omantel complement each other as do our cultures, and we are confident that this deal is value-enhancing to all our stakeholders on multiple fronts,” he added.

Meanwhile, Omantel CEO Talal Said Marhoon Al Mamari said data and content is where growth lies, and investing in innovative digital products is critical to building a stronger company.

He described the acquisition as a strategic move: “as we continue to deliver against our corporate strategy 3.0, create value for shareholders, diversify our revenue, raise our regional profile, and mitigate the risk of operating in a single market.”

The sale of treasury shares of Zain was approved by its shareholders and the Capital Markets Authority of Kuwait earlier this year and the transaction was approved by the board of directors of both parties.

Zain submitted a formal bid for Oman’s third mobile licence earlier this year. The government is due to announce the winning bid on 4 September.