Batelco acquires Jordan mobile operator for $415 mln

AMMAN - Bahrain Telecom (Batelco) has acquired a majority 96-percent stake in Jordan’s third mobile operator Umniah in a deal worth $415 million as part of a regional push, company officials said on Sunday.

Batelco’s chairman Hassan Jumah signed the acquisition deal with Jordan’s Umniah Mobile Communication (UMC) key shareholders in Amman on Saturday with the final completion of the deal set for June 28.

Batelco is owned by Bahrains government and 20 percent by Cable and Wireless of Britain CW.L.

Umniah said the deal reflected strong investor interest in the liberalised Jordanian telecoms market where few government controls remain and overseen by a regulatory watchdog body.

”This is a sign of confidence in the investment climate in Jordan and in our ability to attract investors in the local telecoms market,” said Michael Dagher, founder of Umniah and managing partner who sold his shares.

Industry analysts said the deal reflects higher valuations for telecoms assets in the Middle East on the back of high oil prices with more buyers than existing opportunities.

Batelco, which is the largest company by market capitalisation in the Bahrain Stock Exchange, said the purchase was a strategic move that was part of the firm’s regional push.

“Batelco will continue its ambitious plans to expand its regional presence in the region by targeted purchases of other operators,” Jumah said in a statement.

“We are looking at new markets in the Middle East and northern Africa,” Jumah added.

Batelco’s newly acquired presence in the fast growing Jordanian mobile market was part of its two year 2006-2008 strategy to boost longer term profitability, Jumah said.

Consolidating Batelco’s presence in Jordan, and its other joint ventures in Kuwait and Egypt were a priority, Jumah said without elaborating.

Industry analysts said the acquisition was part of a push by cash rich Arab Gulf operators to expand outside their saturated markets for growth.

“Batelco like other operators in the Gulf are expanding beyond their borders because their own domestic markets are close to saturation or already saturated,” said Jawad Abbassi, general manager of Arab Advisors Group, a leading telecoms consultancy.