In South Africa, MTN and Telkom confirmed that they are still in takeover negotiations. In an update on Monday (22 Aug), the companies confirmed that discussions are still in progress.
The companies previously said their negotiations were “at an early stage” and that there was “no certainty the transaction will be consummated”.
However, shareholders were advised to exercise caution when dealing with their shares, as Telkom’s share price jumped 5% in early trading on Monday morning, while MTN gained almost half a per cent.
In July, MTN approached Telkom’s board with a buyout bid – which will consist of cash or a combination of cash as well as shares. Meanwhile, the black investment group Toto Consortium has made a US$412 million bid to buy the government’s 40.5 per cent stake in Telkom.
According to industry experts, MTN’s proposed takeover, if concluded, would change the face of South Africa’s telecommunications industry, expanding MTN’s reach into fibre technology.
Furthermore, the merger would also come under intense scrutiny from competition authorities and other stakeholders in the sector.
The mobile phone operator, MTN, is currently the country’s second-largest service provider after Vodacom. Telkom became the third largest cellular network provider after entering the market in 2010.
Telkom currently has a roaming agreement with MTN, a partnership signed in November 2021, which allows its customers to access MTN South Africa’s 2G, 3G and 4G services.
Apart from the government’s 40.5 per cent share of Telkom, the Public Investment Corporation (PIC), which invests on behalf of public servants’ pension funds, holds 13 per cent. The PIC also has a 22 per cent stake in MTN.