Ooredoo and Zain will each retain a 49.3% shareholding, while TASC will have the remaining stake through UK-based Digital Infrastructure Assets.
Qatar’s Ooredoo, Kuwait’s Zain Group and UAE-based TASC Towers have signed an agreement to create the largest tower company in the MENA region, in a cash-and-share deal.
The enlarged tower company, comprising approximately 30,000 towers, has a combined estimated current enterprise value of $2.2bn. Ooredoo and Zain will equally retain a substantial stake of 49.3% each in the newly restructured entity, through an asset and cash equalisation process. The founders of TASC will retain the remaining shareholding, through Digital Infrastructure Assets LLP, and will continue to manage the operations of the business.
The tower entity is expected to achieve run-rate revenues close to $500m annually, with an EBITDA (after leases) of more than $200m annually upon the completion of closings in all individual countries including Qatar, Kuwait, Jordan, Iraq, Algeria, and Tunisia. This financial position underpins the promising prospects and profitability of the newly restructured tower company.
The signing of this landmark transaction constitutes a major milestone towards realising key aspects of both Ooredoo and Zains strategies, focused on evolving into smart telcos and creating a value-focused portfolio. It also reaffirms the commitment of Ooredoo, Zain and TASC to drive growth and value for shareholders.
In a joint commentary, Aziz Aluthman Fakhroo, MD and Group CEO, Ooredoo; Bader Al-Kharafi, Zain Vice-Chairman & Group CEO; and Iyad Mazhar, Founder & CEO of TASC, said: This pioneering deal embarks us on an exciting journey together as it results in the establishment of the regions largest independent Tower company, placing the MENA region on the world telecom tower map. It also positions the region as an advanced player in the global telecoms landscape, and we anticipate wide-ranging positive implications for the region from economic growth and upgraded connectivity to technological improvements and increased global relevance.
This strategic transaction will unlock significant shareholder value through higher earnings multiples, as well as ensure capital efficiency, optimising balance sheets for our respective companies and creating new possibilities for investors. The deal also demonstrates our joint dedication to supporting the reduction of the regions carbon footprint, contributing to our vision of reshaping the telecommunications sector by building a more sustainable ecosystem and ensuring a better-connected future for our communities across the region, the CEOs concluded.
As an independent tower company, leveraging the combined assets of Ooredoo and Zain, TASC will offer Passive Infrastructure as a Service (PIaaS) in a partnership model. This creates opportunities for all mobile network operators, offering a capital-efficient alternative to building, owning and managing their passive infrastructure in a cost-efficient and environmentally friendly manner. This partnership model is well-equipped to meet the needs of other mobile network operators seeking to reduce costs, lower carbon emissions, and address the increasing demand for sites driven by double-digit growth in mobile data consumption across the region.
Both Ooredoo and Zain will retain their respective active infrastructure, including wireless communication antennas, intelligent software, and intellectual property concerning managing their telecom networks.
The expected timeline for the completion of this transaction contemplates initial market closings in 2024.
The phased implementation, tailored for each market and adhering to the regulatory environment, is subject to regulatory approvals, ensuring a seamless transition of operations. Ooredoos tower network in Oman is following a stand-alone process.
