The Abraaj Group has agreed to acquire a “significant” minority stake in Société Nationale des Télécommunications, Tunisia’s telecom operator. The seller was Emirates International Telecommunications LLC. No financial terms were disclosed.
Tunis, Tunisia, 13 December 2017: The Abraaj Group (“Abraaj” or the “Group”), a leading investor operating in growth markets, announced today it has entered into a definitive agreement to purchase, through its Funds, a significant minority stake in Société Nationale des Télécommunications (“Tunisie Telecom” or “the “Company”), Tunisia’s largest telecom operator. The stake will be acquired from Emirates International Telecommunications LLC.
Upon completion, this will represent the largest ever private equity investment in Tunisia demonstrating Abraaj’s faith in the Company and in the Tunisian economy.
Tunisie Telecom is the incumbent integrated telecom services operator in Tunisia and serves over five million customers. The Company has state-of-the-art infrastructure, operating a national structure of fixed networks and fiber which enables connectivity to Europe, Africa and Asia, as well as providing the most extensive 3G and 4G mobile coverage in the country. The Company holds a strong competitive position, as it is the leading player in fixed voice and fixed broadband in the Tunisian market.
Tunisie Telecom is one of the most dynamic operators in the region through several acquisitions that have helped grow the Company. Tunisie Telecom holds assets in Malta, Cyprus and Mauritania. In Malta, the Company owns the leading incumbent operator Go Malta, which offers multi-play services such as landline, mobile and broadband. Through Go Malta, Tunisie Telecom is also the leading cable operator in Cyprus.
Tunisia enjoys a 132% mobile penetration rate and is witnessing growing demand for mobile data and fixed broadband. This was supported by the launch of three 4G licenses by the Tunisian Government in 2016 which spurred the growth of data consumption. According to the Tunisian regulatory agency, mobile data consumption increased by 30% in August 2017 relative to the previous year. Fixed ADSL subscriptions have also increased 9% over the same period. The Tunisian telecommunication market is expected to keep growing, as data usage continues to expand driven by increased smartphone penetration, over the top applications (OTT), e-commerce, the internet of things, Internet Protocol Television or 4k Television and the adoption of other technologies.
Abraaj, in partnership with the management team of Tunisie Telecom and the Government of Tunisia, has developed a robust value creation strategy to grow the Company as a pan-Mediterranean telecom leader. By leveraging Tunisie Telecom’s talent and network leadership, the Group will assist Tunisie Telecom in enhancing its customer service experience and the development of 4G and LTE technologies to capture growing market demand.
Ahmed Badreldin, Partner and Head of Middle East & North Africa at The Abraaj Group, said: “This is a landmark transaction for Abraaj, as it marks our first investment into the telecommunications sector, as well as our 10th investment in Tunisia. The telecommunications industry in Tunisia is experiencing exponential growth driven by favorable government policies and a rapidly evolving economy. With these positive factors at play, we see immense potential for the sector to advance further. In Tunisie Telecom, we are partnering with a market leader in this dynamic sector. Driven by strong consumer demand, Tunisie Telecom is well positioned to capture greater market share and cement its leading position in Tunisia and beyond.”
Mohamed Anouar Maarouf, Minister of Information Technologies and Digital Economy, said: “The enabling environment established by the Government has helped the Tunisian telecom market go from strength to strength in recent years. We believe that the state-of-the-art infrastructure we have put in place, coupled with favorable dynamics, will ensure this trend is set to continue. It is at this critical juncture in the industry’s development that we are delighted to welcome Abraaj, a committed investor in our market that has helped grow many Tunisian businesses, as a partner in one of our most prominent assets. We look forward to working with Abraaj as we develop our strategy to position Tunisie Telecom as a pan-Mediterranean telecom leader.”
Abraaj has helped pioneer the development of the private equity industry in North Africa and has been investing in the region since 2006. The Group is one of the leading private investors in Tunisia with 10 investments in the country, including the North Africa Hospital Holdings Group, a healthcare platform focused on enhancing accessibility of quality healthcare, Lilas, a leading producer of disposable household and personal care products, and L’Accumulateur ASSAD, a leading battery manufacturer.
The transaction will close once customary closing conditions including government approvals are obtained.
Freshfields Bruckhaus Deringer LLP and Meziou, Knani & Khlif acted as legal advisors, while Arab Banking Corporation B.S.C. (Bank ABC) acted as sole underwriter and arranger of the transaction.
About The Abraaj Group
The Abraaj Group (“Abraaj”) is a leading investor, purpose-built for operating in the growth markets of Africa, Asia, Latin America, the Middle East, and Turkey. Employing over 300 people, Abraaj has over 17 offices spread across five regions with hubs in Dubai, Istanbul, Mexico City, Nairobi and Singapore. The Group currently manages c. US$ 13.6 billion across targeted investment strategies.
Abraaj has realized c.US$ 6.7 billion from over 100 full exits, and Funds managed by the Group have made over 200 investments across a range of sectors including consumer, energy, financial services and healthcare. The Group is committed to the highest environmental, stakeholder engagement and corporate governance standards and is a signatory to the United Nations-backed Principles for Responsible Investment and the United Nations Global Compact. Abraaj’s founder, Arif Naqvi, was appointed to the United Nations Global Compact Board by UN Secretary-General Ban Ki-moon in 2012 and to the Interpol Foundation Board in 2014.