France Telecom Orange is rumoured to be close to an agreement to buy Congo-China Telecom, the fourth-largest mobile operator in the Democratic Republic of Congo that is owned by China's ZTE and the Congolese government.
The deal, which France Telecom confirmed in comments emailed to FierceWireless:Europe, could value the Congolese company at about €160 million, according to Bloomberg, which reported that the deal could be completed as soon as this week. The move would fit in with France Telecom's acquisition strategy, as the operator already owns a number of African operators, including in Cameroon and the Ivory Coast, and is known to be looking in Africa and the Middle East for potential acquisitions.
A spokesman for the French operator said: "We can confirm we are in currently in exclusive negotiations with ZTE with a view to acquiring their 51 per cent stake. We have also submitted an offer to to the Congolese government for their 49 per cent as part of an official tender offer. The government confirmed at the beginning of September that France Telecom is the only candidate, but the process is not yet complete and we are still waiting for confirmation that our offer is acceptable."
On the other side of the acquisition fence, France Telecom is in the process of initiating a sale of Orange Switzerland and private equity group CVC is reported to be considering a bid for Orange Switzerland, according to a Reuters report, which cited unnamed sources. However, Reuters cited sources as saying that France Telecom is reluctant to allow CVC to join the auction for Switzerland's third-largest mobile operator.
This is because CVC owns second operator Sunrise, and France Telecom is concerned that CVC's presence in the auction would deter other potential bidders and that any tie-up between Orange Switzerland and Sunrise would again hit regulatory hurdles, Reuters said, citing its sources.
France Telecom said the process is going ahead as planned, and it has received several indications of interest from private equity firms and telecoms operators. The operator declined to comment on the Reuters report, however. The operator added that it hopes to complete the process by the end of the year, and remains confident that it will be able to attract a good price for its asset.
An attempt by France Telecom to merge the two businesses failed in 2010 after competition regulators ruled a reduction to two players from three would be bad for consumers. Sunrise was then sold by TDC to CVC for $3.3 billion a year ago.
Aside from the two acquisition rumours, France Telecom's own ownership structure has been in the press this week: Dow Jones Newswires reported CEO Stephane Richard as saying he would not be opposed to the French state reducing its stake in the company.
However, Richard also suggested that with a share price of €11, he would not advise the state to sell its assets now. The French government currently holds 27 percent directly and indirectly in the French telecoms giant.
For more:
- see this Bloomberg article
- see this Reuters article
- see this Dow Jones Newswires article
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