MTN, Orascom in merger talks: reports

Robert Clark
26 Apr 2010

South African-based largest telecom operator, is in talks with Orascom Telecom about acquiring its African telecoms assets, reports say.

The deal could leave Orascom chairman Naguib Sawiris with a stake in MTN, Africa's largest mobile operator, reported Monday.

MTN confirmed to the FT that it was in talks about a transaction, but would not disclose the target.

Trading in Orascom's global depositary shares in London has suspended pending an announcement by the company.

MTN is considering buying Orascom's mobile businesses in Algeria, Tunisia, Burundi, Central African Republic, Namibia and Zimbabwe – valued by Nomura analysts at about $6 billion.

MTN was not interested in Orascom's mobile businesses in Canada, Pakistan, Bangladesh and North Korea, FT said, quoting sources close to the deal. MTN also does not want Orascom’s minority stake in Egyptian cellco ECMS.

The deal would have a better chance of success than the complex Bharti-MTN merger abandoned last year, an MTN investor told Bloomberg.

MTN had approached banks for $5 billion to help fund the acquisition, other sources told the wire service.

Bharti last month signed a $10.7 billion deal to buy the African assets of Kuwaiti telco Zain.

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