France Telecom has bought 93.9 million MobiNil shares, each costing EGP202.5 ($33), thus meaning the total value of the transaction was EGP19 billion ($3.1 billion). The deal means that France Telecom has increased its stake to 94%, while Naguib Sawiris, the founder of MobiNil, has agreed to retain a 5% interest in the company, although he has the option to sell his entire stake from September this year.
The operator first signed a non-binding Memorandum of Understanding (MoU) for the sale of the majority of Naguib Sawiris's share in the Egyptian Company for Mobile Services (ECMS), which operates under the MobiNil, in February this year. The acquisition of 94% of the shares was made possible following MobiNil's board of directors approving the mandatory tender offer submitted by France Telecom, while in April the Egyptian Financial Supervisory Authority (EFSA) gave its approval for the deal to take place, on the provision that a list of technical requirements were fulfilled.
France Telecom is keen to expand its operations in Africa and the Middle East, while it is also looking to exit a number of its European markets. In the first quarter of 2012 MobiNil saw its revenues increase by 3.5% y/y, a positive result following a difficult year that saw its service disrupted by the change in government following the Arab spring. Meanwhile, France Telecom's Orange Jordan unit has invested approximately $700 million on infrastructure over the past 10 years, of which $114 million was spent on the establishing its 3G network; investment will continue as Orange prepares its network for LTE services.