Dangote is Not Strong Enough to buy 9Mobile, Globacom

According to the Guardian, Airtel and Globacom are battling for the acquisition of 9Mobile (nee Etisalat NG). Dangote (Aheri Engineering), Abraaj Capital, Africa Capital Alliance, Carlyle Group, Centricus Capital,  Africell, Helios Towers, and Smile are also in the hunt. Barclays Africa has till Dec 31 to conclude the bid.

Bharti Airtel is currently battling Globacom, Dangote (Alheri Engineering) and seven others for 9mobile – formerly the local unit of Etisalat – as bankers push to complete a sale by December 31.

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9mobile is being sold after regulators saved the company from collapse when both an investment fund and Etisalat exited the country in June following the default of a $1.2 billion loan

I had noted that Globacom would buy 9Mobile since June. Analysts polled by Guardian are not far: “Market Analysts believed that the battle for the soul of 9Mobile rest strictly between Globacom and Airtel because of their financial war chest and experiences in the Nigerian market”.

Jan 1 2018 will be very interesting as 9Mobile changes hands. If any of the non-telcos buys 9Mobile, Glo is likely going to get the node to run it. And if that happens, the fund will pay Glo management fees. Being #4 will make it hard for 9Mobile to exist as a separate operating telco in Nigeria, for long.

Yes, any entity buying 9Mobile should not be thinking along the line of running it as a separate company. MTN, being #1, is not positioned due to antitrust issues. Airtel does not look very strong as it continues to struggle to find profitability in Africa. And asking a new operating entity would be a bad decision as no one can do magic for a #4 operator. But strange things happen: someone can buy it for asset stripping.

 

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