Orange, one of the world's largest mobile communications companies, announced that it has agreed to acquire the 71.25 per cent stake in the Egyptian operation MobiNil Telecommunications S.A.E. (MobiNil) currently owned by France Telecom. This is in line with the intention expressed at the time of the IPO of Orange in February 2001. The addition of Egypt means Orange will have operations in 22 countries across Europe and beyond.
Orange will acquire joint control of MobiNil with Orascom Telecom Holding S.A.E. as its partner. MobiNil owns 51 per cent of Egyptian Company for Mobile Services (ECMS). ECMS was formed in 1998 and awarded its GSM900 licence the same year. ECMS markets its services under several brands including MobiNil, Moga and Alo. With 2.10 million active subscribers at 31 March 2002, ECMS is Egypt's number one provider of wirefree services. In the year ended 31 December 2001, ECMS recorded consolidated revenue of Egypt pounds 2,320 million (EUR 507 million at Egypt pounds 4.58:EUR 1), EBITDA of Egypt pounds 1,065 million (EUR 233 million) at a margin of 45.9 per cent, and net profit of Egypt pounds 341 million (EUR 74 million). The transaction will have a significant positive impact on the Orange Rest of the World segment.
Commenting on the acquisition, Jean-Francois Pontal, CEO of Orange SA, said: "We are pleased to be adding ECMS to the Orange group, thereby expanding the Orange footprint to a country with almost 70 million inhabitants and adding a valuable asset to Orange's portfolio."
As part of the France Telecom group, ECMS is already an active participant in Orange's value creation teams and Orange's international division has been represented on the Board of Directors of ECMS since 2001. Orange believes that MobiNil can continue to deliver strong results in a currently under-penetrated market with exciting growth potential."
The consideration for the acquisition - which will be funded through Orange's existing shareholder loan facility with France Telecom - is EUR 324 million in cash. The acquisition price values ECMS (on an enterprise value basis) at 6.3 x 2001 EBITDA. The conditions relating to the transaction have now been met and the acquisition is expected to become effective this month.
