The proposed deal by MTN, Africa’s largest wireless carrier, to buy Telkom has fallen through, Telkom said on Wednesday.
The two companies caused a stir in July when they announced they were in talks about a potential tie-up which critics said would have created a duopoly. However, Telkom said the negotiations have since collapsed.
“MTN terminated discussions in relation to the MTN proposal on 18 October 2022, as Telkom was not in a position to provide MTN with assurances around exclusivity,” Telkom said.
“Discussions were at an early stage and had not progressed due 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 bona fide offers.
“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.”
In a separate statement, MTN confirmed that the negotiations had broken down.
“After extensive engagements and deliberations between the parties, shareholders are advised that the discussions regarding the proposed transaction have [been] terminated, as the parties were unable to reach agreement to their mutual satisfaction on the process going forward,” said MTN.
Sunday World reported in July that the deal was likely to face major opposition from the cabinet. For the deal to go through, it would need buy-in from the government, which has a 40% stake in Telkom.
Another significant player was the Public Investment Corporation (PIC), which manages public servants’ pensions.
The PIC has significant exposure on both sides, owning a 14% stake in Telkom, whose CEO is Serame Taukobong, and a 22% interest in MTN Group, which is headed by Ralph Mupita.
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