Mobilink and Warid Telecom merge into one company to boost network

Mobilink and Warid Telecom merge into one company to boost network

The merger will accelerate the availability of high-speed mobile telecommunications and provide best-in-class mobile network

ISLAMABAD (Pakistan) – Pakistan’s telecom industry is about to witness a revolution as the parent companies of Mobilink and Warid Telecom have reached a merger agreement on Thursday, agreeing to merge their operations into a single entity.
Amsterdam-based telecoms company VimpleCom Ltd along with its associates agreed to merge their Pakistan Mobile Communications Ltd (Mobilink) and Warid Telecom (Pvt) Ltd to boost their network and expand mobile financial services.
Mobilink will first acquire 100 per cent of Warid’s shares in consideration for the Dhabi Group (Warid’s parent company) shareholders acquiring approximately 15pc of Mobilink shares, according to a joint press release issued by both companies says
The merged entity will serve over 45 million mobile customers and will become the leading high-speed mobile network in Pakistan, claims the release. The merger will create synergies worth $500m.
The merger is expected to create capital and operating expenditure synergies of about $500 million, the companies said in a statement on Thursday.
Mobilink CEO Jeffrey Hedberg will serve as chief executive of the combined business and its finance chief Andrew Kemp will also retain his role. The firm’s board of directors will have seven members, comprising six nominated by Vimpelcom and Global Telecom Holding and one nominated by the Dhabi Group.
For Vimpelcom, Thursday’s announcement is the latest in a series that will reshape its business.
“This transaction follows a number of strategic milestones for the company, including our recent joint venture announcement with Wind and 3 Italia in Italy and the agreement to sell our operations in Zimbabwe,” said company CEO Jean-Yves Charlier.
“This is yet another important step in our journey to continue delivering on our strategy to transform Vimpelcom and improve our competitive position in our operating markets,” he said.
“Creating the largest operator in Pakistan is a significant milestone for Mobilink and Warid but also for Pakistan as a whole. 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,” Dhabi Group Chairman Sheikh Nahyan Mubarak al Nahyan said.
Mobilink, which is owned by Vimpelcom via its Global Telecom Holding unit, leads the Pakistan mobile market with 35.2 million customers at the end of September, giving it a 29% share, according to statistics from the Pakistan Telecommunication Authority (PTA).
Warid is the smallest of the country’s five mobile operators with 10.3 million customers and an 8.5% market share.
The transaction is expected to close in the next six months, subject to regulatory approvals, and the merger is due to take place within the following six months.
Details of the Transaction
  • As part of the Transaction, Mobilink will first acquire 100% of Warid’s shares in consideration for the Dhabi Group shareholders acquiring approximately 15% of the shares of Mobilink (the “Transaction”). Following completion of the Transaction, the parties intend to merge Warid into Mobilink in due course (the “Merger”).
  • The Transaction is expected to close within six months from today, subject to obtaining approvals from the relevant authorities in Pakistan and the satisfaction of customary closing conditions. The Merger is expected to close within 6 months from closing of the Transaction, subject to the satisfaction of customary closing conditions. 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.


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