Orascom Telecom and Hutchison Whampoa

Orascom Telecom and Hutchison Whampoa

Orascom Telecom and Hutchison Telecom announced a comprehensive global strategic alignment of their mobile businesses in emerging markets. The deal includes the acquisition of a 19% stake in Hutchison Telecom by Orascom Telecom for $1.3bn; the alignment of their procurement processes; the formation of a Joint Steering Committee to identify and pursue co-operation opportunities; and the nomination of two new members (from Orascom Telecom) to the Board of Hutchison Telecom. The deal makes sense as both companies have about the same targets (mobile services in countries with large populations and low penetration of telecommunications services), but are operating in different countries. Their combined operations cover 15 countries and about 2bn people, and have a combined 40m customer base growing at a 100% rate. The deal will allow the two companies to get cheaper prices from suppliers of network and IT equipment, and is a promise of increased income.