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Telecoms M&A: Weather extends European holdings to Greece

Egyptian telecoms group Weather Investments continues its penetration of European markets following the acquisition last month of Greek rival TIM Hellas. The deal comes 18 months after the company, which is 97% owned by Naguib Sawiris, bought Italy’s Wind, which was the largest acquisition in Europe by a Middle East concern.

The TIM Hellas transaction marks another phase in Sawiris’s ever-growing telecommunications group, which hopes to gain a 100% stake in another Greek company, Tellas, and enter new Asian markets, such as North Korea, later this year.

Weather Investments now owns 100% of TIM Hellas after buying out private equity firms Texas Pacific Group and Apax Partners for €500 million. A statement from Weather said that the deal would be financed with debt provided by Citi, Banca IMI and Deutsche Bank. The deal, which was completed on February 6 subject to EC approval, will involve Weather taking on TIM Hellas’s net debt, which is about €2.9 billion.

Although Weather paid a hefty price for TIM Hellas, analysts are generally positive. "Sawiris paid €3.4 billion, the next highest bid was rumoured to be about €3.2 billion," says Melvyn Cooke, telecommunications analyst at Standard & Poor’s. "[However], he is a savvy investor and can obviously see growth potential in TIM Hellas, probably through generating synergies with other companies in his portfolio."

Value driven

Wael Ziada, an analyst at EFG-Hermes, says: "Sawiris is an efficient and aggressive player, at the same time as being ver

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y rational.

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