By Roger Field
Chairman seeks to downplay acquisition rumours following media speculation
Etisalat has denied that it is in talks with Zain regarding the acquisition of a stake in the company or “any of its assets in Africa”, in an apparent move to downplay comments made by the chief of Etisalat’s international unit earlier this week.
Jamal al-Jarwan, chief executive of Etisalat’s international unit told Reuters on Tuesday that the company was “interested in Zain as a whole, given the right values” and added that the company was “looking at a 51% stake”.
But in a brief statement issued by Etisalat today, Mohammed Omran, chairman of the UAE incumbent, appeared to distance himself from the comments. "We did not present any proposal or bid to acquire a stake in ‘Zain’ or any of its assets in Africa. We also did not negotiate nor discuss any of these issues with ‘Zain’ officials,” Omran said.
However, the statement fell short of denying Etisalat’s interest in Zain or any of its units, indicating that al-Jarwan’s comments may have referred to internal discussions regarding potential acquisitions.
Al-Jarwan’s comments regarding potential acquisitions were met by mixed reactions from analysts, who viewed the idea of a tie up between Etisalat and Zain as being complicated given the amount of overlap between the geographic footprints of the two companies.
Milan Sallaba, partner at Oliver Wyman, a Dubai-based consulting firm, said such a deal would be “not straight forward at all” given the presence of both firms in Saudi Arabia and Nigeria. “It may be a challenge from a business case perspective to offer a premium if key assets are in overlapping markets where the regulator might not allow an operator to effectively own two networks,” he said.
Etisalat’s statement came at the end of a tumultuous week that has seen the company at the centre of conflicting reports regarding a bond issue and damaging reports over spyware it issued to its Blackberry users.