7/27/2019 Bharti Completes Acquisition of Zain

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Bharti completes acquisition of Zain's Africa biz for$10.7bnNEW DELHI: In the largest ever telecom takeover by an Indian firm, Bharti Airtel today completed

a deal to buy Kuwait-based Zain Telecom's African business for $10.7 billion (about Rs 48,000

crore).

Announcing the closure of the deal, Sunil Mittal said, "We are delighted at the closure of thistransformational deal forIndia and Bharti Airtel. The transaction is the largest ever cross-border

deal in an emerging market and will result in combined revenues of about $13 billion."

On March 30, 2010, Bharti had entered the deal to acquire Zain Telecom's operations in 15

nations, excluding Sudan and Morocco. Zain has operations in 17 African countries.

The closure of the deal implies that Bharti has received all the approvals from the governments

and regulators of each of these 15 nations.

This acquisition, besides giving Bharti its much-desired presence in Africa, makes it the world's

fifth largest wireless company with operations across 18 countries and a subscriber base of

around 179 million.

The Zain acquisition, the second largest by an Indian entity after Tatas' Corus deal, would take

the revenue of the combined entity to an estimated $13 billion.

The African business would widen Bharti's reach, which was hitherto restricted to Asia and the

Indian Ocean region with businesses in Sri Lanka, Bangladesh and Seychelles.

Of the $10.7 billion enterprise value of Zain, Bharti will be paying $8.3 billion upfront and $700

million after a year. It would also take over approximately $1.7 billion of Zain's debts as on

December 31, 2009.

Of the $8.3 billion paid to Zain, Bharti has raised debt from a consortium of foreign banks and

State Bank of India with the lead-arranger and lead-advisorStandard Chartered Bank committing

the highest amount $1.3 billion, followed by Barclays at $900 million.

The rest of the co-advisors ANZ, BNP, Bank of America-Merrill Lynch, Credit Agricole CIB,

DBS, HSBC, Bank of Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Banking Corporation have

allocated $600 million each.

State Bank of India has agreed to an up to $1 billion loan in rupee terms.

Bharti Airtels investors finally have something to be happyabout.

June 9, 2010, 1:16 PM

Indias largest mobile phone operator by subscribers said on Tuesday that it had

completed its $9 billion acquisition of most of the Africa assets of Kuwaits Mobile

Telecommunications Co., or Zain, providing a much needed respite to the stock, which had

tumbled about 18% in the past two months.

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7/27/2019 Bharti Completes Acquisition of Zain

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The news sent Bhartis stock soaring 5.0% by early afternoon, outpacing the benchmark

Sensexs 0.8% rise.

Analysts also remain concerned about when Bharti will be able to see any meaningful

benefit from the deal. Already mired by stiff competition and strained balance sheet due to

the third-generation bandwidth auction, it may be a few years before the company begins

to see its margins expanding.

With about four or five established players currently present in the African market, Bharti

may need to spend aggressively on marketing and introduce lower tariffs to gain significant

market share even though Zain Africa already has a presence in 15 countries, analysts

say.

Also, the deal was widely regarded as being expensive and in the light of the current

environment for the telecom sector in India, the pressure on Bhartis balance sheet may

continue a concern echoed by Standard & Poors, which lowered its long-term corporate

credit rating on Bharti Wednesday.

We lowered Bhartis rating to reflect our expectation that the companys leverage and

cash-flow protection measures will deteriorate significantly following its largely debt-funded

acquisition of Zain Africa BV, the rating agency said.