Dubai investment company acquires Virgin Mobile Middle East and Africa

The telecom company operates the Virgin Mobile and Friendi Mobile brands in the UAE, Saudi Arabia, Oman and Kuwait

Founded in 2006, Virgin Mobile Middle East and Africa serves more than three million users in the GCC region. AFP

Beyond One, a subsidiary of private investment company Priora Management Holding in Dubai, has acquired Virgin Mobile Middle East and Africa (VMMEA).

Dubai-based VMMEA is one of the largest mobile virtual network operators in the region, with active operations under its Virgin Mobile and Friendi Mobile brands in Saudi Arabia, the UAE, Oman and Kuwait.

The terms of the acquisition and the financial details of the deal were not disclosed.

“We are looking at the acquisition of companies with a strong position and significant growth potential in their respective markets,” said Markus Tagger, group chief executive of Beyond One.

“Both Virgin Mobile and Friendi Mobile benefit from strong brand equity and significant trust from their customers, partners and employees, and we will do what is in our power to maintain this.”

Beyond One said this was the first transaction to be approved under Saudi Arabia's 2021 decree that approves foreign direct investment and allows non-Saudis to take full ownership of organisations in a certain sectors.

“The acquisition … [included] an increase in ownership in the Saudi subsidiary that was above the regulatory threshold for foreign ownership, thereby requiring the respective approval,” it told The National.

In the UAE, Virgin Mobile operates under Emirates Integrated Telecommunications Company, the parent company of Dubai telecoms company du.

Beyond One's acquisition includes all its minority subsidiary interests in different countries, it said.

The company has increased its ownership in VMMEA to a “clear control stake”, it added.

The telecoms industry is going through a major transformation, especially with the advent of new technology that operators are trying to integrate into their operations to add new revenue lines.

In 2022, the value of merger and acquisition deals in the telecoms sector declined by 52 per cent annually to $79 billion, from $163 billion in 2021, consultancy Bain said in a report.

The drop in values is partly because there were a larger number of transactions without disclosed deal values compared with the previous year, particularly in the Americas and in infrastructure, the report said.

“Two other factors contributed to the drop in total deal value last year: the higher cost of debt and a 14 per cent decrease in the number of deals in 2022 compared with 2021.”

Regionally, Europe, the Middle East and Africa dominated the majority of global transaction values last year, accounting for about 50 per cent of the total.

“Facing unprecedented industry transformation and emerging competitive threats, many telecommunications companies are turning to mergers and acquisitions to add new capabilities and evolve their businesses for the next era,” Bain said.

Founded in 2006, VMMEA serves more than three million users in the GCC region, operating a digital communication platform for both its Virgin Mobile and Friendi Mobile operations, the company said.

Virgin Group will invest alongside Beyond One and retain a minority stake in the company and a seat on the board, it said.

“Virgin Group is a long-standing investor in the company [VMMEA] and is looking forward to the partnership with Beyond One as it heralds a new digital future for the region,” said Josh Bayliss, chief executive of Virgin Group.

Established in Dubai in 2021, Beyond One is a technology, media and telecoms investment and operations company.

It is on track to complete further acquisitions in other high-growth markets around the world and is currently in negotiations with additional targets in the communications, FinTech and entertainment space, it said.