MTN interested in Orascom’s African assets

South African mobile operator MTN Group is in talks with Naguib Sawiris’ Orascom Telecom with respect to purchasing the latter’s African mobile phone businesses.

The talks are said to have begun as discussions about MTN buying Orascom’s Algerian mobile operator but expanded to include most of Orascom’s African businesses, according to people familiar with the situation.

Sawiris predicted consolidation of the telecom market in Africa, and said his company would be willing to participate in the process should the right opportunity presented itself

MTN, Africa’s largest mobile operator, confirmed in a statement on April 22 that it was in talks that “may or may not lead to a transaction”. It did not identify the other company.

Trading in Orascom’s global depositary shares in London was suspended pending an announcement by the company.

MTN’s move on Orascom, which has a market capitalisation of US$7 billion, reinforces Sawiris comments recently that the telecom market was set to consolidate and that he would be willing for his company to participate in that process.

MTN is reported to be considering buying most of Orascom’s African assets, including Algeria, Tunisia, Burundi, Central African Republic, Namibia and Zimbabwe.

It is understood that MTN is not interested in Orascom’s minority stake in ECMS, Egypt’s leading mobile operator. MTN is also not interested in Orascom’s mobile businesses in Canada, Pakistan, Bangladesh and North Korea.

Djezzy, Orascom’s Algerian business, is the biggest profit generator of its African assets, though Sawiris has been considering selling it since the Algerian government issued Djezzy with a US$597 million tax bill last year.