Saudi Arabia’s second-largest telecom company, Zain KSA has approved the binding offer submitted by a consortium led by the Kingdom’s sovereign wealth fund, Public Investment Fund (PIF) to acquire 80 percent of stake in its 8,069 tower infrastructure for $807 million.
As part of the consortium’s offer, PIF will acquire a 60 percent stake in Zain KSA, while Sultan Holding Company and Prince Saud bin Fahd bin Abdulaziz obtain 10 percent each.
Zain KSA will retain the remaining 20 percent share in the unit. However, the PIF has a call option to buy the 20 percent for a specified amount, the company said.
The telecom company will sell its passive, physical towers infrastructure and retain all other wireless communication antennas, software, technology, and intellectual property with respect to managing its telecom network.
This transaction follows an in-depth evaluation to complete due diligence and ensure compliance with the Kingdom’s regulatory requirements and obtain the necessary approvals, and is in line with the strategy to develop the local Information and Communication Technology (ICT) sector and localize the related technologies in the Kingdom.
Bader Al Kharafi Vice-Chairman & Group CEO Zain
“This transaction creates enormous shareholder value and gives Zain KSA greater financial muscle to invest in cutting-edge technologies and innovation that enhance the customer mobile and data experience. We congratulate the Kingdom’s leadership, the PIF and regulatory authorities for their wisdom in creating an environment that raises the telecom sector to new heights in line with Saudi Vision 2030. The proceeds of this sale will enhance the company’s financial liquidity and profitability. The completion of this transaction in Saudi Arabia follows similar pioneering tower deals Zain has completed in its operations in Kuwait and Jordan.”
Zain KSA is the Saudi unit of Kuwait-based telecom operator Zain Group. The completion of this transaction in Saudi Arabia follows similar tower deals that Zain has completed in its operations in Kuwait and Jordan.
The PIF plays an integral role in the Kingdom’s Vision 2030 plan, which seeks to diversify the Arab world’s largest economy and reduce its reliance on oil.
In its five-year strategy, the fund aims to more than double the value of its assets under management to $1.07 trillion and commit $40 billion a year to develop the domestic economy until 2025.
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