Cape Town – Mobile telecommunication company MTN is reportedly in formal talks to buy Telkom.
According to IOL, the announcement was made by both companies on Friday.
MTN wished to acquire Telkom’s entire issued share capital in exchange for shares or a cash and share combination.
The discussion were still in the early stages.
If the deal succeeded, MTN would have to buy out the government because it owned 40% of Telkom, while the Public Investment Corporation (PIC) owned 14%, the report said.
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“The transaction, if concluded, may have a material effect on the price of the company’s securities. Accordingly, shareholders are advised to exercise caution when dealing in the Company’s securities until a further announcement is made,” MTN said in a statement as quoted by the report.
The deal was likely to face intense scrutiny from the Competition Commission and other regulators given the size of the two companies and their dominance in the sector, BusinessTech reported.
MTN currently has 34.5 million subscribers, making it the second largest mobile operator behind Vodacom. Telkom has 16.9 million mobile subscribers.
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Compiled by Sinothando Siyolo
