Orascom eyes merger with Telekom Austria

Egyptian telecommunications group, Orascom Telecom, is in talks with Telekom Austria to either buy a stake in the operator or merge it with Orascom, according to reports.

If Orascom merged with Telekom Austria, the combined group would have a footprint across 16 countries in Africa, Asia and Europe.

The Austrian government’s holding company, OeIAG, is the largest single shareholder in Telekom Austria with 27.37 per cent, and would need to approve the sale of any stake.

The remainder of the Austrian operator is floated on the stock market with a valuation of approximately €6.9 billion (US$9.8 billion).

OeIAG and Telekom Austria have not commented on the rumours which initially ran in an Austrian newspaper, however, the operator’s CEO Boris Nemsic stated in an interview last month he was “open but neutral” on possible “strategic partnerships” with other telecoms operators.

Telekom Austria has operations in Austria, Bulgaria, Croatia, Slovenia, Liechtenstein, Serbia, Macedonia, Belarus and Czech Republic, with 16.5 million subscribers as of June 2008.

It is believed that private equity firm Weather Investments – which is controlled by Orascom chairman and CEO Naguib Sawiris – would work with Orascom on a proposed deal.

Orascom’s telecom empire currently owns operators in Algeria, Pakistan, Egypt, Tunisia, Bangladesh and Zimbabwe with 74 million subscribers at the end-March 2008, while Orascom’s subsidiary Cheo Technology acquired a mobile licence in North Korea in January.