Dangote Industries is said to have acquired 60% stake in Etisalat Nigeria. This is based on unconfirmed but reliable sources in Nigeria’s financial services sector.
Dangote Industries is owned by Africa’s richest man, Aliko Dangote with investment across various sectors of Nigeria and Africa’s economy.
According to the sources who pleaded not to be named, French and one of the major mobile carriers in Africa, Orange Telecom as well as Vodafone are in high-level discussions to take up the remaining 40% stake in Etisalat Nigeria.
The rumoured acquisition might further lend credence to suspicion about the pedigree of the newly constituted board of directors for Etisalat Nigeria. Funke Ighodaro, the newly appointed CFO of the mobile carrier was Chief Financial Officer of Tiger Brands Limited from 2011 to 2016. Tiger Brands was taken over by Dangote after Tiger Brands South Africa sold their majority stake back to Dangote in 2016.
Another vital suspicion that further give credence to the likelihood of a Dangote takeover of Etisalat Nigeria, is the new CEO of the company, Boye Olusanya. According to his profile as released by Etisalat Nigeria, he has “handled high-level responsibilities at Dangote Industries Limited where he served as Chief Business Transformation Officer responsible for management of all enterprise-wide projects in the Group”.
The source also disclosed that Dangote Industries has always been on the board of Etisalat Nigeria. As a matter of fact, the source disclosed that Etisalat’s 3G license was acquired from Alheri Mobile Services Limited, a Dangote Industries company.
Sources said the acquisition by Dangote will not be disclosed at the moment in order for the new management of the company to focus on restructuring the mobile carrier. Sources were not also sure how much Dangote is paying to take up the 60% equity position.
Neither Dangote Industries nor Etisalat Nigeria can be reached to comment on the matter. Orange and Vodafone have neither denied rumours of their involvement nor confirmed it. However, Orange itself said it was looking at doing more acquisition in Africa.
Early this year, Orange’s African commercial director, Yannick Decaux told Bloomberg that Orange is looking at doing more acquisition deals. The carrier already has deals finished across Bostwana, Cameroon and Ivory Coast. Orange also agreed to buy Millicom’s Democratic Republic of Congo operations for USD160 million last year. He, however, stressed they will look at acquisition deals ‘on a case by case basis’.
At the time Yannick spoke on Orange’s appetite for more acquisitions, the group was targeting Bharti Airtel B.V., owners of Airtel Nigeria. The latter has itself been in loss position since 2015 (that is two years in a roll). The breakdown of negotiations between Bharti and Orange was attributed to the high price demanded by the Bharti. An opportunity for Orange to get a cheaper way into Nigeria might have provided itself with the case of Etisalat Nigeria.
It would be recalled that Etisalat Nigeria entered troubled waters after it was unable to meet up with the repayment of its USD1.2 billion debt it owed a consortium of 13 local banks and other international lenders. Mubadala Development Company PSJC, a 45% shareholder and Etisalat Group of UAE with 40% stake in the company have since exited their stake after debt negotiation broke down.
Etisalat Nigeria is Nigeria’s fourth largest mobile carrier amongst four carriers with about 19 million subscribers. There is no public information on its revenue profile, but Ibrahim Dikko, a spokesperson for the company disclosed in April that the company had its best financial year in 2016 with a positive EBITDA.