Gulf telecom firms Ooredoo, Zain, TASC in talks to combine tower assets

DUBAI, July 24 (Reuters) - Qatari telecoms company Ooredoo (ORDS.QA), Kuwait's Zain Group and Dubai-based TASC Towers Holding have entered into exclusive talks to create the Middle East and North Africa's largest tower company, they said in a joint statement on Monday.

The negotiations are "to combine their approximately 30,000 telecommunication tower assets in Qatar, Kuwait, Algeria, Tunisia, Iraq and Jordan into a jointly owned independent tower company in a cash and share deal," the statement said, adding they aimed to sign definitive agreements this quarter.

Following a Reuters report, Ooredoo said in September it was "preparing for a potential carve out" of 20,000 of its towers without elaborating on the plans, while sources close to the matter said at the time it had engaged Morgan Stanley to work on a deal.

"Both Ooredoo and Zain will retain their respective active infrastructure, including wireless communication antennas, intelligent software, and intellectual property with respect to managing their telecom networks," the joint statement said on Monday.

"This transaction will create a potential shareholder value uplift for both Ooredoo Group and Zain Group through a more efficient capital structure."

Ooredoo's towers in Oman are "following a stand-alone process," they added.

Gulf carriers, like peers elsewhere, have been divesting from tower assets to reduce infrastructure costs and focus on information and communications technology, with such deals attracting specialised tower operators looking to enter new, high-growth markets.

Zain Saudi Arabia last year moved to sell 8,069 towers to Saudi Arabia's sovereign Public Investment Fund for about $800 million, Omantel in 2021 sold 2,890 towers to Helios Towers for $575 million, Saudi Telecom spun off its 15,000-plus towers into a subsidiary called Tawal in 2019 and Zain sold 1,620 telecoms towers to IHS Holding for $130 million in 2020.