Etisalat drops Zain bid
According to IT analysts, the removal of Etisalat's bid to take over the Gulf company means it is losing out on the Moroccan market, which would have continued the UAE-based company's push into North Africa.
“The current political unrest in the region” and “non-unanimous agreement among Zain shareholders” mean the offer is “no longer viable,” says Etisalat in a Bloomberg Business Week report.
Etisalat offered $12 billion in September to buy most of Zain. The collapse of the deal comes after two months of political unrest across the Middle East and North Africa that has toppled Egyptian and Tunisian presidents, created civil war in Libya and prompted deadly clashes in Yemen and Bahrain.
Etisalat also cites Kuwait's “upcoming mandatory offer rules” for the deal's collapse, states FT.com.
The Capital Markets Law, which took effect this month, means any acquirer seeking more than 30% of a listed Kuwaiti company, must make the same offer to all remaining shareholders.
Etisalat is facing increasing competition in its domestic market, where it still gets most of its revenue, and has been looking for opportunities across the Middle East and Asia for some time.
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