Orascom terminates discussions with MTN over Algeria

Orascom Telecom has announced it has terminated discussions with South Africa’s MTN Group over the sale of certain operations and specifically Djezzy in Algeria, due to the failure to reach a deal.

“This follows the failure in talks between the MTN Group and Weather Investments SpA,” read Orascom’s short press statement, referring to its parent company.

If successful, the deal would have given MTN an entry into Orascom’s most lucrative market Algeria, as well as the populous country of Egypt. Orascom’s other operations are based in Tunisia, North Korea, Bangladesh, Pakistan, the Central African Republic, Burundi, Namibia and Zimbabwe.

On June 3, Orascom’s chairman Naguib Sawiris confirmed that MTN had offered US$7.8 billion to purchase Djezzy in Algeria, while analysts estimate the entire group to be valued between US$10-12.6 million.

Algeria’s government presented a major barrier to a successful deal having previously threatened to block negotiations between MTN and Orascom, saying it had the first right to bid in any proposed transaction of a company in Algeria before foreign parties. Additionally, there remains regulations which stipulate that any foreign company wishing to invest in the country must cede a 51 per cent shareholding to locals.