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Johannesburg - MTN [JSE:MTN] has ended talks with Egypt's Orascom Telecom about a potential acquisition, sinking a deal that could have created the world's third-largest mobile operator, MTN said.
Africa's top cellphone service provider and Orascom began talks in late April but were opposed by Algeria's government, which wants to buy Orascom's unit in that country for itself.
Analysts have said that without the money-spinning Algerian unit Djezzy the deal would have little meaning for MTN, which is desperate to expand and needs a foothold in North Africa.
It was the fourth time in three years that MTN has come up short in attempting to expand beyond its key markets of South Africa, Nigeria and Iran.
Talks with India's Reliance Communications fell apart in 2008 and MTN then twice pursued a tie-up with another Indian firm, Bharti Airtel.
"MTN shareholders are advised that discussions have been terminated," the company said on Wednesday in a statement. No one at MTN was immediately available for comment.
Shares of MTN could benefit from the news, said David Lerche, a telecoms analyst at Johannesburg-based Avior Research.
"I do think the news is good because it removes uncertainty around acquisitions regarding the shares," he said.
"Part of the reason the share has performed badly recently is that people have been a bit concerned about what sort of multiples they will be paying for an acquisition."
MTN shares extended a gain slightly after the news, finishing up 3.2% at R101.40.
- Reuters
