Africa's largest mobile operator, MTN, has walked away from yet another large deal, this time from the possibility of taking over Egyptian-based operator Orascom's African business.
Late yesterday afternoon, MTN released a statement on the Johannesburg Stock Exchange news alerts site saying it has terminated talks with Orascom's parent company, Weather Investments. Investors are no longer required to trade with caution.
MTN initially started talks with Orascom in April, with the aim of spending around $10 billion for a few of Orascom's African operations, including Egypt, Algeria, Central African Republic, Zambia and Zimbabwe.
The company does not provide a reason for walking away from discussions, but the turmoil between Orascom and Algeria is likely the reason.
The jewel of the Orascom Group and MTN's prize, Djezzy, based in Algeria, has become a battle ground between Orascom and Algier's officials.
MTN would have had its eye on Djezzy as its ultimate prize, because it remains Orascom's top performer and has the largest customer base, at 15 million SIMs on the network. Djezzy alone was valued by MTN at $7.8 billion.
However, Orascom and the Algiers government have had a strained relationship, which prompted analysts to say a deal with MTN would be ideal.
The Algerian government has been against a big deal between MTN and Orascom since it was first announced. It has maintained the right of first refusal when it comes to Djezzy, which will now likely be nationalised.
Analysts have maintained that without Djezzy, MTN was always likely to walk away from the deal.
Orascom has begun negotiations for the sale of Djezzy to Algiers.
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