Telecoms giant MTN is reportedly in talks to buy another telecommunications player in the country, Telkom.
News of the impending acquisition has pushed the stock price of Telkom by 33%, a much smaller career in South Africa. But the deal isn’t done yet.
In a statement released today, MTN had indicated in paying shares or a combination of cash and stock – whichever is agreed upon.
While excitement is brewing over the imminent purchase and Telkom shares have rallied a bit, there’s no assurance the deal will fly at the end of the day, a reality that both sides have affirmed. Talks are still at an early stage, and nothing is assured.
MTN is making the offer because it wants to strengthen its hold in the telecoms sector and has the financing to do so, having disposed of some of its assets in the past few years.
Still, whatever the two should decide on – assuming Telkom will eventually go to MTN – will face serious regulatory scrutiny. And only after the regulators approve would there actually be an acquisition.
An acquisition would be a major coup for MTN, which is seriously looking to strengthen its market within South Africa and across the African continent.
