Moroccan authorities have said that Etisalat must partner with a local business as a condition of its deal to acquire a majority stake in incumbent operator Maroc Telecom, according to sources cited by Reuters.
Etisalat (Abu Dhabi, United Arab Emirates) is currently in negotiations with Vivendi (Paris, France) about acquiring the French media conglomerate’s majority stake in Maroc Telecom (Rabat, Morocco), but the deal requires the assent of Moroccan regulatory authorities.
According to press reports, authorities appear to believe that a local partner will act as something of a safeguard, ensuring than an Etisalat-controlled Maroc Telecom continues to invest in the broadband and mobile networks needed to improve Morocco’s economy.
The government owns 30% of Maroc Telecom, with Vivendi holding a 53% stake in the operator.
Morocco’s insistence that Etisalat find a local partner may be slowing progress on the takeover, but the Middle Eastern operator is reportedly not opposed to the demand.
According to Reuters, a deal would see the local partner acquire the 17% of Maroc Telecom that is floated on the stock exchange or part of the government’s 30% stake.
Moroccan legislation would also require Etisalat to make a bid for the minority shareholders.
Public bank Caisse de Depot et de Gestion (CDG) (Rabat, Morocco) is cited as a possible candidate for the role of local partner because of its financial strength and close ties to the state.
Vivendi, meanwhile, remains keen on finalizing the deal as soon as possible so that it can reduce debts and return money to shareholders.
The company is in the midst of a strategic transformation aimed at lessening its exposure to the telecoms sector and focusing resources on its traditional media activities, which include video gaming, pay television and movies.
Cash-rich Etisalat is looking for avenues of growth outside its saturated domestic market and could use a move into Morocco as a possible springboard for other acquisitions in the region.