By James Boxell in Paris - April 12, 2012 - Financial Times
France Telecom has moved closer to assuming almost full control of its Egyptian mobile phone venture, Mobinil, after agreeing to buy out most of the shares owned by tycoon Naguib Sawiris and other minority shareholders.
The French telecommunications operator, eager to cement its position in the Arab world as it pulls out of mature European markets, said it would now seek approval for the deal, worth as much as €1.5bn, from Egypt’s market regulator.
Stéphane Richard, France Telecom’s chief executive, said the offer showed his “continued, strong commitment and belief in this business’s potential and in the Egyptian economy in general”.
France Telecom owns about 71 per cent of Mobinil, which in turn owns just over 50 per cent in a listed vehicle known as Egyptian Company for Mobile Services, which operates the brand.
If the deal is approved, France Telecom would raise its stake to 95 per cent of Mobinil, leaving 5 per in the hands of Mr Sawiris. He would retain a voting interest of 28.75 per cent to ease Egyptian worries about national ownership. Mr Richard said he also intended about 15 per cent of Mobinil to be held by Egyptian investors if conditions allowed.
Mr Sawiris is expected to sell down the remainder of his stake gradually over the next few years. A prominent Coptic Christian who belongs to one of the biggest business families in Egypt, Mr Sawiris has become increasingly involved in politics, with his secular views sometimes offending the country’s Muslim population.
Egypt is a crucial market for France Telecom, accounting for almost half its mobile customers in its expanding regional Africa and Middle East business.