Vivendi Universal has emerged as one of the suitors for Zain’s operations in Africa. The deal would be worth an estimated Sh936 billion ($12 billion).
If Vivendi succeeds, it would mark an ironical return of the company to the Kenyan market, after selling its 60 per cent stake in KenCell — the predecessor of Zain Kenya — to Celtel in 2005, for $230 million. Celtel in turn sold the business to the Kuwait-based company, Zain, in August last year, as part of the larger Celtel Africa, which spans 12 African countries, for $3.4 billion.
South Africa’s MTN is said to be another contender.
Vivendi is one of the largest European entertainment companies. It has a 56 per cent stake in a French mobile network — SFR — that offers mobile services in Re-Union Islands and Morocco, and it is likely that this is the brand the African operation will don.
MTN has operations in much of the region, but Kenya has remained elusive for it. It unsuccessfully attempted to buy KenCell in 2004.
Zain has grown the Kenyan operation.
It has, for instance, built the 13 per cent market share it had at the time of the takeover, to over 20 per cent currently.
However, it sill remains a distant second to Safaricom with a market share of about 70 per cent.
For Sh930 billion, Zain could make a handsome profit for the company it bought for $3.4 billon.
Zain Group has posted record results for the financial year ended December 31, last year, with revenues increasing by 26 per cent to reach $7.441 billion, although fourth quarter results were hit by currency fluctuations, according to an unnamed company official.
Zain, which has operations in 22 countries across the Middle East and Africa, increased its customer base by 50 per cent to reach 63.5 million subscribers, while net profit increased by 6 per cent compared with 2007 to reach $1.2 billion.
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