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MTN Group halts acquisition plan for Telkom, after Rain offer threatened deal



Acquisition talks between network providers, MTN Group and Telkom, have broken down, as both companies disagreed on the way forward pertaining to the deal.

MTN Group had demanded for exclusivity on the deal which would have made the y’ello network the biggest telecom firm in South Africa, however, Telkom said it can’t offer such.

Recall that MTN Group had announced in July 2022 that it planned to acquire Telkom, and both companies were in talks. However, the refusal to hand MTN Group exclusivity pertaining to the deal means other firms could send in offers as well.

This means MTN Group will have to compete with any company interested in also acquiring Telkom. Already, market rival, Rain, has also tendered a bid that threatens MTN’s offer.

READ ALSO:Nigerians to pay more to browse internet, as MTN, airtel increase data price

On Wednesday, Telkom said the deal had fallen through as a result of the company not assuring MTN exclusivity. It was gathered that MTN terminated discussions on Tuesday.

“MTN terminated discussions in relation to the MTN proposal on 18 October as Telkom was not in a position to provide MTN with assurances around exclusivity”, the statement from the firm reads.

“Discussions were at an early stage and had not progressed due to diligence nor had a binding offer been received by the Telkom board of directors.

“The Telkom board has a legal and fiduciary duty to consider all bonafide offers”, Telkom said, adding, “Shareholders are, therefore, advised that they no longer need to exercise caution when dealing in the company’s securities.

“Telkom continues to execute its strategy to unlock value for shareholders and will provide an update to the market on progress in due course.”

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