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France Telecom and Agility to acquire 44% stake in KOREK TelecomMar 18, 2011 (Datamonitor Financial Deals Tracker via COMTEX) -- France Telecom SA and The Public Warehousing Company K.S.C. (Agility) have signed a binding agreement to acquire a 44% stake in KOREK Telecom, LTD., an Iraq-based provider of global system for mobile communications (GSM) services. France Telecom is provider of telecommunication services, while Agility is a Kuwait-based company engaged in the provision of global integrated logistics solutions. A joint-venture will be formed by Agility (54%) and France Telecom (46%) which will provide Korek Telecom with new capital against 44% of its equity. Under the terms of the agreement between Agility and France Telecom, Agility will contribute its existing convertible debt and inject an additional payment of $50 million, in exchange for a 24% indirect stake in Korek Telecom and a $100 million 4-year shareholder loan to Korek Telecom. France Telecom will pay $245 million for a 20% indirect stake in Korek Telecom, and will extend a $185 million 4-year shareholder loan to Korek Telecom. In addition, France Telecom will have the opportunity to exercise an option in 2014 to increase its indirect stake in Korek Telecom to 27% and, in the process, gain indirect control of the company, thereby consolidating Korek Telecom in its accounts. If this option is exercised, Agility will be able to sell part of its indirect stake in Korek Telecom to France Telecom, resulting in France Telecom's indirect interest in Korek Telecom increasing up to 39% in 2014 and up to 51% as from 2016. Rumor (November 25, 2010): According to Telecompaper, Financial Times reported that France Telecom is planning to acquire a minority stake in KOREK Telecom. Reportedly, Korek is planning sell a 35% to 49% stake in the company. The transaction is valued at approximately $1,500 million. Deal Value (US$ Million) 295 Deal Type Acquisition Sub-Category Minority Acquisition Deal Status Announced: 2011-03-14 Deal Participants Target (Company) KOREK Telecom, LTD. Acquirer 1 (Company) France Telecom SA Acquirer 2 (Company) The Public Warehousing Company K.S.C. Deal Rationale The acquisition of stake in Korek Telecom is a new step in France Telecom's policy of expansion outside Europe, and contributes to its stated aim of doubling its revenues in Africa and the Middle East by 2015. % Acquisition 44% |