MTN Backs Out of Acquiring Telkom Because It Was Entertaining Other Proposals, SA Is Happy Talks Fell Through

• MTN's planned acquisition of Telkom has fallen through after the two companies could not agree on some terms
• Following the two companies' announcements, their share prices dropped, with Telkom taking the biggest hit
• South Africans weighed in on the deal falling through and how their data costs will be affected in future

JOHANNESBURG - MTN has abandoned its plan to take over Telkom, an industry move that would have formed the biggest telecommunications company in South Africa.

Telkom lost a fifth of its market value since its shares started depreciating in 2009.

Preliminary talks between the two companies fell through because Telkom could not guarantee MTN that their discussions would remain exclusive. Times Live reported that Telkom said that no binding offer by MTN was on the table.

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"Discussions were at an early stage and had not progressed to due diligence, nor had a binding offer been received by the Telkom board of directors."

MTN said it wanted to engage Telkom exclusively without it considering other proposals, as the companies agreed before starting negotiations. The companies could agree on the process that would suit them both going forward, which was the end of their discussions.

"The parties were unable to reach agreement to their mutual satisfaction on the process."

The new mobile communications company Rain also made Telkom an offer in return for some stake in the company. Telkom was considering both options from the mobile companies, reported Mail and Guardian.

Following the announcement, both companies' shares fell in the market, with Telkom taking the biggest hit of 25% on Wednesday by 3 pm.

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Below are some comments from South Africans:

@bantuafrique said:

"Atleast our data prices can still be affordable."

@Bosula_12 suggested:

"It's not supposed to happen, not now. Maybe after we have a few new players in the industry."

@MosothoThaba stated:

"Exclusive' is the word."

@nicksoper added:

"MTN stops talks to acquire Telkom, shares drop nearly 25%."

@stuartlowman asked:

"So you're saying MTN won't Rain on Telkom's parade?"

MTN sets its sights on SA’s 3rd largest mobile operator, Telkom, netizens unimpressed by bid

Briefly News previously reported that Africa’s biggest mobile network, MTN, plans to take over Telkom. The companies released notices stating that discussions into the acquisition are underway.

Telkom is the country’s third largest mobile operator, and its shares skyrocketed to 28% after the companies made the announcement.

Source: Briefly News