Morocco wants local partner for Maroc Telecom deal-sources

Mergers, Acquisitions and Financial Results

Morocco wants Gulf telecom operator Etisalat to take on a local partner as a condition of backing its bid for a 53 percent stake in Maroc Telecom, three sources familiar with the matter said.

French company Vivendi, which wants to sell its controlling stake in the kingdom's biggest mobile and fixed communications provider, needs the state to approve the buyer.

The government, which owns 30 percent of Maroc Telecom, wants to ensure that the new owner of the country's largest employer invests heavily in broadband and mobile infrastructure needed for the economy.

Its demand for Etisalat to find a local partner is slowing the deal's progress, but is not expected to derail it completely. Etisalat would retain majority control and consolidate the business on its books, and is not opposed in principle to having a minority shareholder, two of the people said.

France's Vivendi and Etisalat have been negotiating the deal since late April when the United Arab Emirates-based company submitted an offer, which the seller chose over a lower bid from Qatar-backed Ooredo.

"Morocco would like to be able to rely on another solid Moroccan partner that could eventually become the voice of Morocco within the company's board," said one source who asked not to be identified because the deal negotiations are private.

The final deal structure is still being hammered out and it remains to be seen who the local investor will be, the people said.

The local partner would not buy part of Vivendi's 53 percent stake, but could buy the 17 percent of Maroc Telecom that is floated on the stock exchange or part of the government's 30 percent stake. Under Moroccan financial market rules, the buyer of Vivendi's stake would have to launch a bid for the minority shareholders in any case.