South African mobile operator MTN Group Ltd is in talks to buy smaller domestic rival Telkom for a stock or a cash-and-stock deal, the two companies have announced, sending their shares higher.
“Discussions are at an early stage and there is no certainty that the transaction will be consummated,” they said in a statement on the Johannesburg Stock Exchange on Friday.
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Telkom’s shares jumped nearly 30 percent following the announcement, while MTN was up by nearly 5 percent.
The deal between MTN and Telkom, if successful, would bolster MTN in its competition against market leader Vodacom Group, as the carriers look to expand 4G and 5G connectivity to more parts of the country.
South Africa completed a radio frequency spectrum auction in March that was needed to roll out 5G.