Ooredoo, Zain, and TASC Tower Reshape Telecom Landscape
In a landmark collaboration, leading telecom players Ooredoo, Zain Group, and TASC Towers Holding have finalized agreements to establish the largest tower company in the MENA region valued at USD 2.2 Billion.
The advisors
DLA Piper acted as the legal advisors for Ooredoo, and both Herbert Smith Freehills (HSF) and Norton Rose Fulbright (NRF) jointly acted as the legal advisors of Zain Group and TASC Towers Holding. Shearman & Sterling (S&S) acted as the legal advisors of Digital Infrastructure Assets.
Morgan Stanley acted as the exclusive financial advisor to the Ooredoo Group, and Citigroup Global Markets Ltd acted as the exclusive financial advisor to Zain Group and TASC Towers Holding on this transaction.
The merger, sealed through a cash and share deal, will integrate nearly 30,000 towers, culminating in an estimated enterprise value of USD 2.2 billion. The strategic partnership positions Ooredoo and Zain with equal substantial stakes of 49.3% each, while TASC’s founders, managed by Digital Infrastructure Assets, will retain the remaining shareholding and continue overseeing business operations.
The combined tower company is anticipated to generate run-rate revenues of close to USD 500 million annually, with an EBITDAaL (after leases) surpassing USD 200 million each year upon the conclusion of individual country closings. These countries include Qatar, Kuwait, Jordan, Iraq, Algeria, and Tunisia, outlining a robust financial standing for the restructured tower entity.
Aziz Aluthman Fakhroo, MD and Group CEO of Ooredoo (pictured above), Bader Al-Kharafi, Zain Vice-Chairman & Group CEO (pictured above), and Iyad Mazhar, Founder & CEO of TASC, jointly emphasized the transformative impact of the deal. They lauded it as a significant stride towards positioning the MENA region prominently on the global telecom tower map. The collaboration echoes the commitment of the three entities to fostering growth, creating shareholder value, and driving advancements in the telecommunications sector.
The tower company, operating independently, will provide Passive Infrastructure as a Service (PIaaS) through a partnership model. Leveraging the combined assets of Ooredoo and Zain, TASC aims to offer a capital-efficient alternative for mobile network operators, presenting a sustainable solution to build, own, and manage passive infrastructure in an environmentally friendly manner. This model aligns with the growing demand for sites driven by the substantial growth in mobile data consumption across the region.
Ooredoo and Zain will retain active infrastructure components, encompassing wireless communication antennas, intelligent software, and intellectual property essential for managing their respective telecom networks. The deal is poised to unlock shareholder value through enhanced earnings multiples and capitalize on capital efficiency, optimizing balance sheets for the involved companies.
The transaction, scheduled for completion in 2024 following regulatory approvals, is tailored for phased implementation, ensuring a seamless transition of operations in adherence to regional regulatory environments. Ooredoo’s tower network in Oman will follow a standalone process. The collaborative effort between Ooredoo, Zain, and TASC Towers stands as a testament to their commitment to reshaping the telecommunications sector, creating a more sustainable ecosystem, and ensuring a better-connected future for communities across the region.
The partnership model aims to cater to the evolving needs of mobile network operators seeking cost reduction, lower carbon emissions, and efficient site management. As the trio forges ahead, the telecom landscape in the MENA region is set for a transformative journey marked by innovation, sustainability, and increased global relevance.
This strategic move is anticipated to herald a new era in the MENA telecom sector, fostering economic growth, technological improvements, and heightened global visibility.
