Etisalat eyes Vivendi stake in Morocco's Maroc Telecom

Etisalat said it is interested in buying Vivendi's 53 per cent stake in Morocco's Maroc Telecom.

Etisalat is eyeing its first international expansion in more than two years with a possible acquisition of a stake in Maroc Telecom, with a market value of US$5.8 billion (Dh21.3bn).

The UAE's largest telecoms operator, which operates in 18 markets across the Middle East, North Africa and Asia, submitted a "preliminary expression of interest" for the coveted 53 per cent stake in the Moroccan company, owned by France's Vivendi, it said in a statement to the Abu Dhabi Securities Exchange yesterday.

“Should there be any developments on this subject, we will keep the stock market updated in due course,” said Etisalat.

The French conglomerate Vivendi is exploring selling several assets as part of an ongoing strategic review intended to pay down debt, boost a flagging share price and reduce the group’s exposure to capital-intensive telecoms businesses.

Maroc Telecom, in which Vivendi first bought a stake in 2001, offers fixed-line, mobile and internet services in the kingdom, and is also one of Africa’s main telecoms operators with units in Burkina Faso, Gabon, Mali and Mauritania.

Stéphane Richard, the France Telecom chief executive, confirmed the company’s interest but said it was “not prepared to fight for Maroc Telecom at any price.”

Qatar Telecom, the state-owned operator, has hired JPMorgan Chase to advise it on a potential bid for the stake, sources told Reuters last month. South Korea's KT Corp is also said to be considering a bid for the unit, sources said last month.

Should Etisalat succeed in buying the Maroc Telecom stake it would mark a return to foreign acquisitions for the former monopoly, which spent about $12.6bn between 2004 and 2009 buying companies, licences and other investments abroad, according to Reuters.

Etisalat, which is facing strong competition in its home market from rival du, has looked to its international operations to boost revenues. In the third quarter, while consolidated revenues remained flat at Dh8 billion, Etisalat said revenue from its international operations rose 7 per cent to Dh2.4bn, contributing 30 per cent to the top line.

“If Etisalat can get it for the right price, it would be a great addition,” said Petr Molik, the head of financial advisory at MenaCorp. “It would certainly generate additional cashflow. Maroc Telcom would be very similar to the current Etisalat business in the UAE.”

* with agencies