Oger’s 35 pct stake to be sold to Saudi Telecom
Posted by meb at January 22nd, 2008
Saudi Telecom, the largest Arab phone company, agreed to buy 35 percent of Oger Telecom for 9.6 billion riyals ($2.56 billion) to gain access to customers in Turkey and South Africa and counter growing competition in its domestic market.
Oger Telecom, owned by Saudi Oger Ltd., a Saudi Arabian construction company founded by former Lebanese Prime Minister Rafik Hariri, provides fixed, mobile and Internet services in Turkey, South Africa and Lebanon.
Oger Telecom, based in Dubai in the United Arab Emirates, had revenue of $6.9 billion and 35 million subscribers in 2006, the company said in a statement.
“It’s a good move, and very much in line with Saudi Telecom’s expansion strategy,” Marc Hammoud, an analyst at Cheuvreux Middle East, said.
The purchase is at least the third that Saudi Telecom has made in the past year as it prepares for a new competitor, Zain, to begin mobile-phone service this year in Saudi Arabia, the region’s largest economy. Saudi Telecom now competes with Etihad Etisalat in the kingdom.
In 2007, Saudi Telecom won a mobile-phone license in Kuwait for $908 million, and paid $3 billion for a 25 percent stake in Malaysia’s Maxis Communications.
The Maxis stake gives Saudi Telecom access to 1.4 billion people in Asia and enables it to provide roaming services to at least 1.5 million Indians working in Saudi Arabia.
Oger Telecom will maintain a controlling interest after Saudi Telecom completes the acquisition by the end of the first quarter. Goldman Sachs Group Inc. is Saudi Telecom’s financial adviser, while Citigroup Inc. is advising Saudi Oger.
Controlling stake in Turkey:
Oger Telecom owns 55 percent of the dominant fixed-line operator in Turkey, Türk Telekomünikasyon A.Ş., which in turn owns 81 percent of Avea, the third-largest Turkish mobile operator.
“Türk Telekom is a huge company, and a massive money-generating company, so Saudi Telecom will greatly benefit from this,” Hammoud of Cheuvreux said.
The Turkish fixed-line market is the largest in the region with about 19 million access lines controlled by Türk Telekom, according to a statement by Oger Telecom.
“This acquisition offsets home competition and gives the company a wider footprint,” Diala Hoteit, an analyst at National Bank of Kuwait, said..
“This transaction marks another important milestone in STC’s development and will help us achieve our ambition to become the undisputed leader in the region,” Chairman Mohamad al-Jaser said in a statement yesterday.
source:Turkish Daily News
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