Mobilink, Warid announce maiden telecom merger in Pakistan
LAHORE: Mobilink, a concern of Amsterdam-based telecom company VimpleCom Ltd, along with its partners, on Thursday announced a tie-up in Pakistan with rival Warid Telecom to boost their network and expand mobile financial services.
“VimpelCom Ltd and Global Telecom Holding SAE, together with Warid Telecom Pakistan LLC and Bank Alfalah Limited (Dhabi Group shareholders), reached an agreement to merge their Pakistan telecom businesses,” a joint statement issued by both the telecom firms said.
“The merger of Pakistan Mobile Communications Limited (Mobilink) and Warid Telecom (Private) Limited (Warid) will see the combined entity serving 45 million customers.”
Mobilink is the largest player in the Pakistani wireless market, while United Arab Emirates-backed Warid is the No 5, according to the VimpelCom.
“The transaction is expected to create Capex and Opex synergies with a net present value of approximately $500 million,” it added.
The combined revenue of both the companies for the 12 months to September 2015 was $1.4 billion.
Chief Executive Officer (CEO) Jeffery Hedberg at Mobilink, addressing a press conference, said both the companies will keep operating with their existing pattern for the next six months until the government regulators approve the merger.
Flanked with him, CEO Munir Farooqui at Warid termed the deal a win-win situation for both the companies.
Farooqui said merging with Mobilink is a significant milestone for Warid.
He said further modalities, such as brands, employees’ retention policy and other things will be evolved during the next six months.
As part of the transaction, Mobilink will first acquire 100 percent of Warid’s shares in consideration for the Dhabi Group shareholders, acquiring approximately 15 percent of the shares of Mobilink.
Following completion of the transaction, the parties intend to merge Warid into Mobilink in due course.
The statement said after a four year lock-in period following the date of closing of the acquisition transaction, the Dhabi Group shareholders will have the option to put their shares of the merged company to VimpelCom/GTH, and VimpelCom/GTH will have the option to call the shares of the merged company held by the Dhabi Group shareholders, each at fair market value.
The transaction is the first merger in the mobile telecommunications sector in Pakistan.
Jean-Yves Charlier, Chief Executive Officer of VimpelCom, said: “We are delighted to announce the agreement with the Dhabi Group shareholders to combine our businesses in Pakistan.”
“With the addition of Warid to our already strong customer base at Mobilink, we will serve more than 45 million customers and offer a best-in-class mobile and high-speed data network – a key factor in the digital enablement of Pakistan’s economy.”
Chairman of Dhabi Group Sheikh Nahyan Mubarak Al Nahyan, said: “Creating the largest operator in Pakistan is a significant milestone for Mobilink and Warid but also for Pakistan as a whole.”
“Warid’s partnership with Mobilink will create value for all stakeholders and pave the way for exceptional and cost-efficient telecommunication services for customers. Both parties bring their unique strengths to this merger.”
Warid, with its strong post-paid base and high quality 4G/LTE network will complement Mobilink’s position in the market.
The statement said the new entity will allow Mobilink and Warid to accelerate the availability of high-speed mobile telecommunications and provide consumers and businesses with a best-in-class mobile network, more competitively priced services and wider access to enablement facilities, such as mobile financial services.