MTN calls off Orascom purchase
MTN has been left looking for another acquisition target, after talks to purchase Orascom Telecom’s African assets broke down yesterday due to regulatory hurdles.
The South African telco walked away from the deal after the Algerian government objected to the sale of Orascom’s Djezzy unit – the most profitable of the assets on the table -, to MTN, FT.com reported.
It is MTN’s fourth failure to expand through merger or acquisition in the past two years, after two attempts to thrash out a merger with India’s Bharti Airtel and a third deal with Bharti rival Reliance, also fell by the wayside.
MTN had been negotiating with Orascom majority shareholder Weather Investments for the purchase of some, or all, of Orascom's assets since April.
Djezzy was an attractive target. It is Algeria's largest mobile operator and Orascom's single largest source of revenue according to the WSJ.
But it is also a millstone around Orascom's neck, with Algerian authorities halting dividend repatriation from the unit, and demanding $600 million (€500 million) worth of back taxes in November for a period in which Djezzy was operating under tax-exempt status.
MTN also denied reports it has held fresh talks with Reliance about buying a 26% stake in the Indian carrier.
AT&T and Etisalat are also in the running for the share, which Reliance has put on the market to help clear mounting debts, and fund 3G network rollout.