Johannesburg/Cairo : South Africa's MTN Group ended talks with Egypt's Orascom Telecom about a potential acquisition, sinking a deal that could have created the world's third-largest mobile operator.
Africa's top mobile phone operator began talks in late April about acquiring Orascom or some of its assets. The deal was complicated by Algeria's government, which wants to buy Orascom's unit in that country.
Analysts have said that without the money-spinning Algerian unit, Djezzy, the deal would have little meaning for MTN, which is desperate to expand and needs a foothold in North Africa.
The failure highlights the political and regulatory risks facing potential deals in emerging markets where mergers and acquisitions of telecoms are at an all-time high.
MTN which needs to push beyond its key markets of South Africa, Nigeria and Iran, has failed to do a deal four times in the last three years.
Takeovers of emerging market telecom companies have soared with deals valued at $64.6 billion (Dh237.289 billion) so far this year, according to Thomson Reuters data, more than a third higher than the previous record of $39.4 billion in the first six months of 2006.
Both MTN and Orascom said in separate statements on Wednesday that talks had been terminated. No one was immediately available for comment at either company.
Shares of MTN could benefit from the news, said David Lerche, a telecoms analyst at Johannesburg-based Avior Research.
"I do think the news is good because it removes uncertainty around acquisitions regarding the shares," he said.
