Orascom buys slice of Hutchison
Looking to expand into Asia
Egypt-based Orascom Telecom has forked out $1.3bn (£750m) to acquire a 19.3 per cent stake in Hutchison Telecommunications International as the pair forge closer ties between their mobile businesses.
Not only will the deal give the pair greater buying clout when procuring telecoms gear, it will also help the firms expand into emerging markets in Asia. In particular, Orascom is keen to target India, Indonesia and Vietnam.
As it stands today, Orascom and Hutchison do not clash in any of the markets in which they operate. Between them they control mobile operators in 15 countries including Pakistan, Bangladesh, India and Sri Lanka and boast some 40m subscribers out of a population of some two billion people.
By joining forces, the operators believe they can save money and work together to "expand and develop [their] joint footprint in emerging mobile markets at a rapid pace".
Said Naguib Sawiris, chairman and chief exec of Orascom in a statement: "We have often expressed our keen interest to enter some of the largest and highest growth mobile markets in the world like India, Indonesia and Vietnam. The tie up with Hutchison Telecom presents Orascom Telecom with exposure to these markets.
"Combining the equipment procurement of Orascom Telecom and Hutchison Telecom will increase our leverage with suppliers, reducing the costs of network expansion in all our markets," he said.
Orascom also has the chance to acquire a further 3.7 per cent of the business over the next 12 months in a move that could still closer ties between the operators. ®