South Africa’s fixed incumbent Telkom announced talks to acquire Cell C, confirming months of speculation that it is interested in the country’s third largest mobile operator.
Telkom said it “is currently performing due diligence on Cell C”, with today’s cautionary announcement following on from a statement released by the company at the end of September, stating it was in acquisition talks with an unnamed party.
“Such transaction, if successfully concluded, may have a material effect on the price of Telkom’s securities,” added the company, without adding an indication of how much it would pay for Cell C.
If completed, the deal would help Telkom significantly beef up its relatively small mobile operation, which it said stood at 2.1 million active connections in July, giving it access to Cell C’s mobile connections of more than 20 million.
Speculation surrounding a tie up between the two began to hot up significantly after South African regulators rejected the incumbent’s plans to form a partnership with MTN in August.
Shameel Jossub, CEO of South Africa’s largest mobile operator Vodacom, observed that a deal between Cell C and Telkom “could be a credible tie-up”, during the company’s H1 earnings call earlier today, reports Reuters.
Cell C is majority owned by Saudi Arabia’s Oger Telecom, with a 75 per cent stake.