Mubadala Cedes 40 Percent Equity to Etisalat in Nigerian GSM licence

Mergers, Acquisitions and Financial Results

Mubadala Development Company, the UAE-government owned company that got a Nigerian GSM licence for $400 million earlier this year has simply sold on 40% to Etisalat who will actually operate the licence.

Both companies announced at the weekend that they have sealed a deal for Etisalat (former Emirtel) to operate the license ending months of intense speculations over the choice of operating partner for the Middle East company that was issued the nation's fifth GSM licence by former President Olusegun Obasanjo. Former chairman of United Bank for Africa, UBA, Hakeem Belo-Osagie is believed to be among the key Nigerian investors in the telecom business.

Under the deal, Etisalat will be the operating partner and hold 40 per cent interest in the telecoms company established by Mubadala to own and operate its telecommunications business in Nigeria. Mubadala will now hold 30 per cent interest in the company and the remaining shares are held by Nigerian investors.

When both parties conclude ongoing negotiations, they hope to forward the final agreement to the Nigerian Communications Commission (NCC) to ratify the change in ownership in the standard oversight that the telecoms regulator exercises over licensees. The regulator had said that the Mubadala licence was awarded to Emerging Market Telecommunic-ations Services Limited.

While a commercial launch target for the Nigerian service has been slated for March 2008, the transaction will raise Etisalat's addressable market to 600 million potential customers, an increase of 30 per cent.

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