No purchase price was given, but Orange said it would be around eight times both companies’ annual operating profits before taxes and charges.
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The completion of these transactions remains subject to approval by the competent authorities.
Orange will acquire 100% of the share capital of the two companies, which have a consolidated revenue of around 275 million euros, according to the statement. Lazard and Societe Generale were advisors to Orange for this transaction. Bharti Airtel was advised by Arma Partners LLP. The company had 111.2 million customers in the region 15.5m Orange Money customers.
Airtel, India’s largest telecom player, acquired the assets of Zain Telecom in 17 countries in Africa in 2010 for $10.7 billion in one of the largest acquisitions by an Indian telecom firm.
The rating of Bharti Airtel, however, is unaffected by the company’s plan to sell its operations, it clarified.
In March 2015, Airtel and Orange struck a deal in Africa to allow Orange customers in Côte d’Ivoire to send money to customers of Airtel Money in Burkina Faso, and vice versa, owing to the interconnection between the two operators’ mobile money platforms.
Light Reading is seeking confirmation from Orange of whether this rules out any future deal with Bharti Airtel regarding the Chad and Congo Brazzaville assets. Two years after the targeted date, things are not much better.
Talks regarding those countries appear to have led nowhere, however, with Orange noting that “agreements regarding potential transactions in the remaining two countries have lapsed” in its statement.
Potential targets could include operations in Gabon – where Orange now lacks any presence – and the Democratic Republic of Congo (DRC), where a merger between Orange and the Bharti Airtel business would control about 40% of the mobile market.
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Orange’s Africa and Middle East operations had reported revenues of €1.30 billion for the quarter ended September 30, 2015.
