MTN has advised its shareholders that it has entered into discussions to acquire the entire issued share capital of Telkom in return for shares or a combination of cash and shares.
In a statement on Friday (15 July), MTN said discussions are at an early stage and there is no certainty that the transaction will be consummated.
“The transaction, if concluded, may have a material effect on the price of the company’s securities. Accordingly, shareholders are advised to exercise caution when dealing in the Company’s securities until a further announcement is made,” MTN said.
Telkom confirmed the discussions in a separate statement issued to shareholders.
The deal is likely to face intense scrutiny from the Competition Commission and other regulators given the size of the two companies and their dominance in the sector.
MTN currently has 34.5 million subscribers, making it the second largest mobile operator behind Vodacom. Telkom has 16.9 million mobile subscribers.
Telkom’s share price was up in excess of 25% in mid-morning trade on the JSE, while MTN climbed a percent to R136.26.