In a strategic move towards reshaping the telecommunications landscape, Ooredoo and Mobile Telecommunications Company (Zain Group) have officially inked definitive agreements with TASC Towers Holding (TASC) to establish the largest tower company in the MENA region. The cash and share deal marks a groundbreaking collaboration, aiming to enhance connectivity, drive economic growth, and reduce the region’s carbon footprint.
The enlarged tower company, set to include approximately 30,000 towers, boasts a combined estimated enterprise value of $2.2 billion. Ooredoo and Zain will each retain an equitable stake of 49.3% in the restructured entity, achieved through an asset and cash equalisation process. TASC’s founders, under Digital Infrastructure Assets, will retain the remaining shareholding and continue to manage the business operations.
Upon completion of individual country closings, including Qatar, Kuwait, Jordan, Iraq, Algeria, and Tunisia, the tower entity is expected to generate run-rate revenues close to $500 million annually. The EBITDAaL (after leases) is projected to surpass $200 million annually, underlining the robust financial position and promising prospects of the newly restructured tower company.
Aziz Aluthman Fakhroo, MD and Group CEO of Ooredoo; Bader al-Kharafi, Zain vice-chairman & Group CEO; and Iyad Mazhar, founder & CEO of TASC, jointly emphasised the significance of this landmark transaction. They noted, “This pioneering deal embarks us on an exciting journey together as it results in the establishment of the region’s largest independent tower company, placing the MENA region on the world telecom tower map.”
The CEOs further highlighted the strategic transaction’s alignment with Ooredoo and Zain’s smart telco strategies, creating a value-focused portfolio. The deal, a testament to the commitment of the three entities, is poised to unlock significant shareholder value through higher earnings multiples, ensuring capital efficiency and opening new possibilities for investors.
As an independent tower company, TASC, leveraging the combined assets of Ooredoo and Zain, will offer Passive Infrastructure as a Service (PIaaS) in a partnership model. This presents unprecedented opportunities for mobile network operators, providing a capital-efficient alternative for passive infrastructure management in an environmentally friendly manner.
The partnership model is positioned to meet the needs of mobile network operators seeking cost reduction, lower carbon emissions, and addressing the surging demand for sites driven by double-digit growth in mobile data consumption across the region.
The completion timeline for this transformative transaction anticipates initial market closings in 2024. The phased implementation, tailored for each market and adhering to the regulatory environment, is subject to regulatory approvals, ensuring a seamless transition of operations. Ooredoo’s tower network in Oman is following a stand-alone process.
Morgan Stanley served as the exclusive financial adviser to the Ooredoo Group, and Citigroup Global Markets acted as the exclusive financial adviser to Zain Group and TASC Towers Holding. Legal advisers include DLA Piper for Ooredoo, Herbert Smith Freehills (HSF), and Norton Rose Fulbright (NRF) for Zain Group and TASC Towers Holding, and Shearman & Sterling (S&S) for Digital Infrastructure Assets.
