Korea Telecom talks for Telkom SA stake progressing
12 March 2012 |
Korea Telecom (KT) is still in discussions to acquire a 20% stake in Telkom South Africa, with both companies seeking to conclude the transaction as soon as possible.
The deal is valued at 36.06 South African rand per share, or $505 million overall. A 20% decline in Telkom shares since the deal was first announced in October 2011 may however, lead to a revision of this price.
A review of potential business synergies and benefits has been “substantially completed” according to a statement from Telkom, with talks said to be “going well”, according to KT chairman, Lee Suk Chae.
KT has been exploring investment opportunities in emerging markets as a result of its increasingly saturated domestic market.
Telkom has been seeking to invest in its mobile network, following a decline in fixed-line revenues. It is the smallest mobile player in South Africa with 2.4% market share based on figures recorded in December 2011. The company said it is aiming to capture 15% market share in the next four years.
Telkom was a wholly state-owned entity until 1997 but the South African government still holds an estimated 39.76% of shares in the company, making it the largest stakeholder.
KT is not the first international telco to be interested in South Africa, with both Tata Communications and Bharti airtel investing there in recent years.