FranceTelecom (FTE) has reached an agreement to buy the stakes of one of the largest telecom operators in Egypt, Mobinil. France Telecom, which already holds approximately 71.25% of Mobinil, plans to raise its holding up to 95% through buying the share holdings of Orascom Telecom Holding S.A.E., the other holding company of Mobinil. France Telecom is planning to spend approximately €1.5 billion ($1.97 billion) on bidding for most of shares from Orascom Telecom's owner, Naguib Sawiris, and other minority shareholders. As per the agreement, France Telecom will pay 202.5 Egyptian pounds (approximately $33.5) for each share of Mobinil owned by Sawiris' Orascom Telecom. Following this, France Telecom will then offer the same to the minority shareholders of the Egyptian Company for Mobile Services (“ECMS"), which is the listed (Egypt Stock Exchange) part of Mobinil. The deal is waiting for its regulatory approval by the Egyptian authorities, who are expected to come up with their decision by next week. If the deal goes through, Naguib Sawiris will be entitled to approximately 5% of stakes along with 28.75% of voting interest. Previously, in a preliminary agreement, Naguib Sawiris was said to have agreed to a term per which it would sell its total shareholding in Mobinil to France Telecom, and minority stockholders could have either retained their position in ECMS or accept France Telecom's offer. Expanding position in Mobinil, which primarily competes with Vodafone Group plc's (VOD) Egyptian unit and Etisalat, is considered to be a key step for France Telecom to tap potential opportunities in emerging markets like Arab countries. The company covers around 32.9 million subscribers and has a market share of approximately 39%. Although, Mobinil has registered a considerable drop in its market position owing to various political and religious issues surfacing against one of its prime owner, Sawiris, the company still remains a strong bet for France Telecom given its reach over 90% of the Egyptian population and international networks through roaming agreements with 135 countries.
