Etisalat
is buying 53 per cent of Maroc Telecom from France’s Vivendi for €4.2 billion (Dh20.81bn), the UAE telecoms company’s first overseas acquisition in five years.
The agreement, which both parties signed on Monday, brings a close to months of negotiations.
Etisalat said yesterday it had signed a share purchase agreement to acquire Vivendi’s stake for €3.9bn. Upon the deal’s completion, Etisalat will pay Vivendi €300 million in cash – equivalent to the 2012 dividend of 7.40 Moroccan dirhams a share set aside by Maroc Telecom for Vivendi.
However, the deal remains subject to conditions, including securing competition and regulatory approval from Morocco and other relevant jurisdictions, as well as the execution of a shareholders’ agreement with the Moroccan state, which owns 30 per cent of Maroc.
Moroccan regulations oblige Etisalat to make a takeover offer to Maroc’s other shareholders, which could result in Etisalat further increasing its stake.
The outstanding free float represents 17 per cent of Maroc Telecom’s equity. Etisalat declined to comment on when such an offer would be issued.
Etisalat said in April that it planned to finance the transaction with external funding and had secured the required funds from local and international banks.
A source with knowledge of the matter said the acquisition would be funded with cash and bank loans, but declined to give further details.
Etisalat has been in exclusive talks with Vivendi regarding the Maroc Telecom stake since Qatar’s Ooredoo withdrew from discussions in June.
In July, Etisalat and Vivendi entered into exclusive negotiations, with Etisalat submitting a binding offer to acquire Vivendi’s stake for €3.9bn.
Talks between both parties had been scheduled to last until September 25, but were subsequently extended to the end of last month.
A source close to the process said the extension was not because of fundamental disagreements, but it was due to delays in negotiations during the summer, Ramadan and Eid Al Adha.
Maroc Telecom is Morocco’s largest mobile operator, with a market share of 47.7 per cent at the end of June, according to data from Informa Telecoms & Media.
It dovetails with Etisalat’s strategy to expand into emerging markets in the Middle East and Africa, according to Matthew Reed, principal analyst at Informa.
In addition to its operations in Morocco, Maroc Telecom also has operations in Burkina Faso, Gabon, Mali and Mauritania, which complement Etisalat’s existing presence in eight markets in sub-Saharan Africa.
Mr Reed, however, noted that the operator’s core business in Morocco had been declining in recent quarters amid fierce competition in an increasingly mature market.
“They’ll want to arrest and reverse that decline, it’ll be one of Etisalat’s first priorities once the deal is done,” he said.
Etisalat made an ill-fated investment in India’s Swan Telecom (later rebranded as Etisalat DB) in 2008. Etisalat was forced to wash its hands of that investment last year, after the relationship with local shareholders soured.
The UAE firm subsequently tried to acquire 46 per cent of its Middle East rival Zain in 2010 for US$12bn, only for the deal to fall through in 2011.
In light of those missteps, the acquisition of Maroc Telecom was a welcome boost for Etisalat, said Petr Molik, the head of financial advisory at Menacorp.
“The price they agreed for Maroc Telecom was a fair one. There was no price discount, but neither was there a premium,” Mr Molik said.
“They’ve made a statement that they can do a big acquisition that’s run professionally where they don’t overpay for the assets,” he said. “[Maroc Telecom] is a great cash generator. The margins are there, overall it’ll improve the group and strengthen them in French Africa.”
Etisalat’s shares closed up 1 per cent at Dh11.7 apiece yesterday.
jeverington@thenational.ae
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
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Turkish Ladies
Various artists, Sony Music Turkey
COMPANY PROFILE
Name: Akeed
Based: Muscat
Launch year: 2018
Number of employees: 40
Sector: Online food delivery
Funding: Raised $3.2m since inception
Dates for the diary
To mark Bodytree’s 10th anniversary, the coming season will be filled with celebratory activities:
- September 21 Anyone interested in becoming a certified yoga instructor can sign up for a 250-hour course in Yoga Teacher Training with Jacquelene Sadek. It begins on September 21 and will take place over the course of six weekends.
- October 18 to 21 International yoga instructor, Yogi Nora, will be visiting Bodytree and offering classes.
- October 26 to November 4 International pilates instructor Courtney Miller will be on hand at the studio, offering classes.
- November 9 Bodytree is hosting a party to celebrate turning 10, and everyone is invited. Expect a day full of free classes on the grounds of the studio.
- December 11 Yogeswari, an advanced certified Jivamukti teacher, will be visiting the studio.
- February 2, 2018 Bodytree will host its 4th annual yoga market.
Champions parade (UAE timings)
7pm Gates open
8pm Deansgate stage showing starts
9pm Parade starts at Manchester Cathedral
9.45pm Parade ends at Peter Street
10pm City players on stage
11pm event ends
