South African telecoms operator Telkom said that the government has decided not to support the sale of a 20% stake in itself to South Korea’s KT Corp.
Talks between the two companies first started in October last year and, earlier this month,…
South African telecoms operator Telkom said that the government has decided not to support the sale of a 20% stake in itself to South Korea’s KT Corp.
Talks between the two companies first started in October last year and, earlier this month, Telkom said it had reached an agreement with KT for the stake. The deal value of US$346m was significantly below the previously expected US$495m.
The proposed deal required approval from Telkom shareholders, including the South African government, which owns a 50.7% stake in the company.
But Telkom said today that the South African cabinet has decided not to support the transaction as proposed.
The company added that it will seek to obtain clarity on the consequences of the cabinet’s decision on the deal itself.
In South Africa, Telkom is facing tough competition from its larger rivals Vodacom and MTN. Meanwhile, KT has been looking to expand into new countries and areas as growing further in the saturated South Korean telecoms market has become increasingly difficult.