Korea Telecom has been stymied in plans to acquire a 20% stake in South Africa's Telkom, after South African lawmakers decided not to back the deal.
The two operators had been negotiating since October last year on a stake sale. But on Friday, Telkom revealed it had abandoned plans for the partnership Agence France-Presse said.
A senior South African minister told reporters the cabinet does not support the transaction, but without revealing a reason. South Africa’s government is the largest shareholder in Telkom with a 39.8% stake, and an investment fund for public service pensions owns a further 10.9% stake.
When news of the negotiations first surfaced in October, people close to the deal estimated that it could be worth as much as 4.6 billion rand (€432 million), according to a Bloomberg report. But KT has reportedly since cut its offer to 25.60 rand per share from 36.06 rand per share.
Telkom has been struggling with stiff competition domestically, and attempts to expand its operations into the rest of Africa have proved costly. A failed Nigerian foray resulted in a $1 billion (€804 million) loss. KT has also been seeking to expand into emerging markets to counter increased saturation at home, and an African venture would have kick started the process.