MTN-Orascom Deal: No Easy Way Ahead

MTN, Africa’s biggest mobile operator is eying access to growing markets in Africa and possibly in Asia too, through an anticipated acquisition of all or parts of Orascom Telecom.

If goes through, this deal will result MTN to become fourth largest telecom operator in the world.

However, it looks that deal won’t go in easy manner, particularly in Algeria where the government is reportedly not going to permit the sellout, instead Algerian government may take over Orascom’s unit in Algeria if the Egyptian company attempts to sell it, Algiers-based National Radio reported, citing Finance Minister. Karim Djoudi, as reported by Bloomberg.

Djoudi said April 28 he would object to a takeover of the unit by MTN.

The government has made it clear that any transaction concerning Orascom Telecom Algerie (OTA) will be null and could also lead to the withdrawal of the license granted to the company.

Being Algeria’s largest mobile phone operator and Orascom’s biggest source of revenue, Djezzy has been described as a jewel in the crown at Orascom, because of its size and margins and market share.

Cairo-based investment bank Beltone Financial values Djazzy at $6.7 billion, or 51% of its valuation for all of Orascom.

Acquisition of this profitable firm would boost MTN against its former suitor and current rival, India’s Bharti Airtel.

Apparently any hurdle in the Algerian unit’s sell out may shake the whole deal. This is why Mr. Sawiris is seeking a chance to meet Algerian Prime Minister to resolve the situation.

According to analysts, selling OT (Orascom Telecom) or any of its subsidiaries can generate cash piles that can be funneled up to the holding level.

Tech reporter with over 10 years of experience, founder of ProPakistani.PK

  • no doubt that MTN is a major cellular company in the World but to compete in the local market, they will required to work hard.

  • close