Omantel became the second largest shareholder in Kuwait-based Zain Group after acquiring an additional 12.1 per cent stake in the company for $1.35 billion.
In a statement, Omantel said it had increased its holding in Zain to 21.9 per cent through the deal, with its total stake in the group valued at $2.19 billion.
In August Zain confirmed Omantel acquired an initial 9.84 per cent stake for $846 million.
Kuwait’s sovereign wealth fund remains Zain’s largest single shareholder, with a holding of almost 25 per cent.
The Middle East’s Omantel is the biggest mobile operator in Oman with a 58 per cent market share (its rival in the duopoly is Ooredoo). The award of a third mobile licence in the country has been delayed due to regulatory scrutiny of Omantel’s interest in Zain. Meanwhile Zain has operations across the Middle East region, including Bahrain, Iraq, Jordan and Kuwait.
Omantel boasted that the acquisition creates “a new digital telecom powerhouse capable of leading digital transformation across the MENA region”.
Combined, the new group will be third largest in the region, with 52 million customers.
“Our new scale and diversification will allow us to focus on digital transformation, to generate further revenue growth and accelerate the introduction of innovation products and services that will enable our region to digitise,” added Omantel CEO Talal Said Marhoon Al Mamari.
Outlining the deal terms, Omantel said it had entered into a share purchase agreement to acquire 521,975,146 ordinary shares in October, issued by the Al Khair national for stocks and real estate company, paying approximately $2.58 per share for the stake.
The offer triggered a formal public auction process, complying with rules in Kuwait, which has just been completed.
For more on Zain’s efforts to lead in the digital transformation space, check out a recent interview with the operator’s Scott Gegenheimer here.