Grace Ashiru
According to reports, the MTN Group, the largest telecoms company in Africa, is now in talks to acquire control of the South African telephone company Telkom.
According to ITWeb, Telkom and MTN Group, which are publicly traded companies and both on the list on the Johannesburg Stock Exchange, confirmed the news on Friday in separate comments published on the Stock Exchange News.
MTN, the largest telecommunications company on the African continent, has informed investors as follows: “Shareholders have been told that MTN and Telkom SA have begun conversations regarding the possibility of MTN acquiring the whole issued share capital of Telkom in exchange for either share in MTN or a combination of shares and cash in MTN.
MTN and Telkom have stated that there is no guarantee that the sale will be completed because discussions are still early.
MTN warns investors that the planned acquisition may significantly impact the price of the company’s securities. As a result, shareholders are being cautioned to proceed with prudence when trading in the business’s securities until the company makes an additional announcement.
Following recent statements made by both the CEO of Telkom Group and the CEO of MTN Group, namely that a merger of the telecommunications sector in South Africa is unavoidable, this new development comes as a direct response to those statements.
During his presence at the Think Big series, which was organized by the financial services group PSG, Mupita expressed his opinions and defended them.
At the time, Mupita hypothesized that the most natural strategies for mobile operators to defend their margins were to operate in a duopolistic market and use economies of scale.
It is impossible to maintain a viable business in a market that is already oversaturated with competitors.” There isn’t a big enough profit pool for a variety of industry players to meet their return and other financial goals,” said Mupita.
Two or three big players will control the market in a few years. They will be able to bring in huge amounts of capital from inside and outside the country to keep the industry growing.
