Telkom confirms that it indents to acquire Cell C
The potential acquisition was subject to regulatory approval.
Telkom, which has been investing heavily to ramp up its mobile operations, has confirmed that it is intending to acquire Cell C – ending speculation in the telecommunications industry.
The company said on Friday it had substantially concluded its due diligence, although discussions were at a preliminary stage.
“Telkom has substantially concluded its due diligence, however discussions are at a preliminary stage,” it said in an update to shareholders on Friday.
“The potential acquisition will be subject to Cell C completing a financial restructuring to ensure that its gearing levels are reduced to a sustainable level as specified by Telkom and commercial contractual relationships are renegotiated to terms acceptable to Telkom,” it said.
Telkom has previously made a bid to buy out the country’s number three operator, Cell C, which is facing financial difficulties.
The operator initially tried to take over Cell C in 2017, only to be rejected in favour of a recapitalisation plan led by Blue Label Telecoms, now Cell C's largest shareholder with a 45 percent stake.
Telkom did not provide further details, but did say the potential acquisition was subject to regulatory approval.
On Tuesday Bloomberg reported that a tie-up between Cell C and Telkom’s mobile-phone division would create a business with about 22 million subscribers.