(Bloomberg) — MTN Group Ltd. is in talks to buy smaller domestic rival Telkom SA SOC Ltd. in a deal that would combine South Africa’s second and third-largest telecommunications operators.
MTN would pay for the partially state-owned company in shares or a combination of cash and stock, according to a statement on Friday. Discussions are at an early stage and there is no certainty the transaction will be completed, the carriers said.
Telkom shares soared 15%, the most since September, valuing the company at almost 20 billion rand ($1.2 billion).
Following a multi-year asset-disposal program, MTN is flush with cash and looking to strengthen its hand in core African markets. A combination with Telkom would help close the gap with Johannesburg rival Vodacom Group Ltd., South Africa’s market leader, though a number of competition issues would have to be worked through as the deal would create an effective duopoly.
Bloomberg first reported MTN’s interest in Telkom last year.
More stories like this are available on bloomberg.com
©2022 Bloomberg L.P.
