France Telecom SA is to buy out Mobinil, Egypt's biggest phone operator by revenue.
The French company today reached a preliminary agreement with Orascom Telecom to buy most of Egyptian billionaire Naguib Sawiris' remaining stake in Mobinil, which has a market value of about $2.3 billion according to Bloomberg.
France Telecom's US$2 billion purchase of Sawiris' shares at $33.54 each is to increase the Paris-based telco's stake in Mobinil from 71% to 95%.
Sawiris, who now focuses much of his attention on politics in Egypt, is to retain 5 per cent of the company.
France Telecom's purchase of the tycoon's shares clears the way for the French company to delist Mobinil from the Cairo Stock Exchange.
Analysts also view the move as forming part of the French telco's increasing focus on emerging markets.
In addition to Egypt, France Telecom has operations in Iraq, Jordan, Morocco and the Democratic Republic of Congo.
"France Telecom has an objective of doubling its revenues in the Africa and Middle East region," said Matthew Reed, senior analyst at Informa Telecoms & Media in Dubai.
"It is increasingly looking at emerging markets for growth," he said.
Reed said that even though Egypt faces political and economic uncertainty following last year's uprisings that ousted former president Hosni Mubarak, the country is attractive to telecoms investors because of its large population of 80 million.
Egypt had an estimated 80 744 400 mobile subscriptions towards the end of 2011, according to research by Informa.
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