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Etisalat officially cools talks with Zain

Serbia has called off the auction

UAE operator Etisalat has officially called an end to its talks with Zain, despite the fact that the latter may have found a buyer for its Saudi unit.

In a memo to the Abu Dhabi stock exchange, Etisalat said its discussions with Al Kharafi had ended. The firm noted its extensive due diligence, but highlighted political unrest and the failure of Zain shareholders to reach a unanimous agreement on the deal.

Etisalat, which had been looking to pick up 46 per cent of Zain for an estimated price of between $10-$12bn, let the due diligence period expire earlier this month. The delay had been partly caused by Zain’s rejection of three offers for its Saudi Arabian operation. In order for the Etisalat deal to go ahead, Zain is required to offload its Saudi unit, as Etisalat also has a presence in the country via Mobily.

Yet last week the Kuwait-headquartered carrier accepted an offer of $950m, from a joint venture made up of Bahrain’s Batelco and Saudi Arabia’s Kingdom Holding Company (KHC), for its 25 per cent stake in Saudi’s Zain KSA.

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