Airtel has set an enterprise value of Zain Africa at $10.7 billion, with $10 billion to be paid on closing, and $700 million to be paid one year after the conclusion of the deal. Airtel expects a payout of around $9 billion, based on an estimate of $1.7 billion in debt, as of 31st December 2009. The proposal does not include Zains operations in Sudan (high ARPU) and its Morocco investment. There is also a break up fee of $150 million payable by either side, based on certain terms and conditions.
Price Per Customer
Note: ARPU has been calculated for the 9 month period ending September 30th 2009.
As of September 30th 2009, Zain had a total of 41.987 million customers spread across Africa. Taking into account the September customer base (though December data would be more apt), at $10.7 billion, Zain is being valued at $255.38 per customer. (Correction: had previously incorrectly calculated the amount as 2553.88 per customer. Thanks for correcting Vivek)
Zain expects net proceeds of up to $5 billion after repayment of certain liabilities, and for the proceeds to be reflected in the companys P&L during the second quarter this year. Following these developments, the Zain stock has risen for the second day in a row, reports Bloomberg.
Note that the proposal is subject to due diligence and regulatory approvals, and there are quite a few regulators that will have be dealt with.