The discussions started in September, when Telkom received a non-binding proposal from Rain. Telkom and Rain are the third and fourth biggest telcos in South Africa.
The companies said that, “after initial discussions, but prior to any due diligence, the parties have decided that a suitable transaction is not possible at this time”.
Rain made its approach after MTN had proposed a merger with Telkom for cash or for cash and shares. MTN then decided against the deal, following news of Rain’s approach.
However, Rain’s move was always controversial. South Africa’s Takeover Regulation Panel (TRP) said there were several procedural errors in Rain’s approach after it had allegedly detailed plans for a merger without seeking approval. Telkom at first said no offer or proposal was received.
South African observers are now wondering whether MTN could reconsider continuing its talks with Telkom. MTN opted out last September because it wanted exclusive discussions.
However, the end of talks leaves Rain isolated. It is mainly a 5G network focused on data and the internet of things (IoT).
