South African telecommunications provider Telkom has announced that it has entered talks with Africa’s largest mobile network operator MTN about a possible acquisition of itself by MTN.

According to the statement, the acquisition structure will see MTN  acquiring the entire issued share capital of Telkom in return for shares or a combination of cash and shares in MTN.

Telkom went on to further state that the discussions about the possible acquisition were still at an early stage and that there was no guarantee that they would be fruitful or that the acquisition would take place.

Shareholders were also advised to exercise caution when dealing in Telkom’s securities until a further announcement is made.

Telkom is currently present in over 38 African countries, and though it is majority-privatised, 38% of the company is owned by the government of South Africa.

MTN currently has 34.5 million subscribers, making it the second largest mobile operator behind Vodacom with 45.7 million while Telkom is the third largest mobile operator with 16.9 million mobile subscribers, meaning the resultant entity will become the largest mobile operator in the country by subscription base.

Whether South Africa’s Competition Commission will give the acquisition, which will see the country having a telecoms duopoly consisting of incumbent Vodacom and the entity which will result from the acquisition, the green light remains to be seen.

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