The independent tower company would comprise up to 30,000 towers
Ooredoo Group has entered exclusive negotiations with Zain Group and UAE based TASC Towers to combine their circa 30,000 telecommunication tower assets in Qatar, Kuwait, Algeria, Tunisia, Iraq and Jordan into a jointly owned, independent tower company in a cash and share deal.
Ooredoo CEO Aziz Aluthman Fakhroo (pictured) told Bloomberg TV in February the telco was planning to sell off its telecoms towers and other passive property in an auction, which caused a flurry of excitement among potential suitors.
Both Ooredoo and Zain will retain their respective active infrastructure, including wireless communication antennas, intelligent software, and intellectual property with respect to managing their telecom networks.
The enlarged tower company will continue to operate as an independent and standalone entity providing passive infrastructure as a service throughout the region with a focus on operational efficiencies, synergies and reducing the companies’ carbon footprint.
The telcos will proceed with negotiations on an exclusive basis with a view to signing definitive agreements in Q3 2023. Ooredoo’s tower network in Oman is following a stand-alone process.
The telcos said the transaction will create a potential shareholder value uplift for both Ooredoo Group and Zain Group through a more efficient capital structure. “Both operators are committed to executing on their respective growth strategies to unlock significant capital and maximize value for shareholders while at the same time reducing the carbon footprint within the MENA region,” the companies said in a statement.
The potential transaction remains subject to the usual caveats including an agreement on final terms, the signing of definitive agreements and obtaining all required corporate and regulatory approvals.
Following a Reuters report, Ooredoo confirmed as early as last September it was “preparing for a potential carve out” of 20,000 of its towers without elaborating on the plans, while sources close to the matter said at the time it had engaged Morgan Stanley to work on a deal.
Towers deals in vogue
This latest partnership will form the largest tower company in the MENA region, where there has been a flurry of transactions.
According to Reuters, Zain Saudi Arabia last year moved to sell 8,069 towers to Saudi Arabia’s sovereign Public Investment Fund for about $800 million, Omantel in 2021 sold 2,890 towers to Helios Towers for $575 million, Saudi Telecom spun off its 15,000-plus towers into a subsidiary called Tawal in 2019 and Zain sold 1,620 telecoms towers to IHS Holding for $130 million in 2020.