PARIS/DUBAI: Vivendi SA’s long-flagged deal to sell its controlling stake in Maroc Telecom to Abu Dhabi-based Etisalat is just the first step in the French conglomerate’s bet that it can remake itself as a media-focused company.
Vivendi said yesterday it had entered into exclusive talks to sell its majority stake in Maroc Telecom to Etisalat for ¤4.2bn ($5.54bn) in cash. The deal, when finalised, would be the first major divestment by Vivendi as part of its year-old strategy to reduce exposure to capital-intensive telecoms to focus more on its media business. Vivendi’s shares closed up 2.4 percent, while Etisalat shares rose 1.27 percent on the Abu Dhabi bourse. Vivendi had initially hoped to get as much as ¤5bn for the stake, but the lower price was seen as reasonable given Maroc Telecom’s lacklustre performance lately and the fact that talks on the stake sale had dragged on for months.
“Despite the price disappointment (at a discount to the closing price), the deal is good news for the group, allowing it to begin its restructuring and the reduction of its debt ahead of a possible spinoff of SFR,” analysts at CM-CIC said in a research note.
The deal also signals a new aggressiveness at Etisalat, which had slowed down its pace of dealmaking after an aggressive shopping spree that saw it spend about $12.6bn on acquisitions between 2004 and 2009. Etisalat’s Chief Strategy Officer Daniel Ritz said the Maroc stake negotiations do not signal that the company was on a “buying spree”.
The company is weighing a bid for Pakistan mobile operator Warid Telecom, sources familiar with the matter told Reuters in June. The UAE telco already owns a stake in Pakistan Telecommunications (PTCL).
“We will consider inorganic opportunities in areas where it gives us a chance to consolidate our existing portfolio,” Ritz said.
Reuters
