Orange announced an agreement to acquire Millicom’s operations in the Democratic Republic of Congo (DRC) for $160 million.
The France-based group, which already operates in the DRC, said in a statement the move reinforces its presence significantly in the country, while describing Millicom’s Tigo DRC business as a “perfect fit”, given its complimentary operations.
Millicom is forecast to have 6.4 million connections in the country as of Q1 2016, according to GSMA Intelligence, ahead of Orange’s 5.9 million, with the proposed move cranking up pressure on market leaders Vodacom (12.8 million) and Airtel (12.5 million).
Africacell is currently number three in the market with 9.5 million connections.
Emerging markets player Millicom, which operates in Latin America and Africa, said in a statement the sale is in line with its strategy of supporting consolidation and concentrating resources in its most promising markets.
“Proceeds from the sale will strengthen our balance sheet allowing us to reinvest in our existing Latin America and African markets, improve earnings and cash flow and reducing leverage”, said CEO Mauricio Ramos.
The company told Mobile World Live in an emailed statement it would add more detail behind its capital allocation strategy on Wednesday, when it reveals its full year results.
For Orange, the proposed deal comes just weeks after it sealed a deal with Airtel to buy its operations in Burkina Faso and Sierra Leone. The company however saw separate talks to acquire subsidiaries from the Indian operator in Chad and Congo Brazzaville fall through.
“This acquisition underlines Orange’s strategy in Africa which aims at developing and maintaining leading competitive positions across its various countries of the operations on the continent,” Orange added.
The deal with Millicom is still subject to regulatory approval.