South Africa dampens Rain, Telkom merger

South Africa dampens Rain, Telkom merger

The South African government disapproved of operator Rain touting a potential merger between it and to merge with rival Telkom.

Reuters reported, that Rain owner and chairman Patrice Motsepe said yesterday the network provider has proposed a merger with Telkom to prevent rival MTN from acquiring it.  

South Africa’s Takeover Regulation Panel (TRP) a government agency, said the prosed merger did not receive regulatory consent.

The TRP said: "The publication of the announcement by Rain is unlawful, and Rain has been instructed to retract the announcement.

"In the circumstances, all parties (i.e., shareholders) and the market are advised to disregard the announcement."

MTN announced last month it was in negotiations with Telkom in stocks or cash and shares takeover deal which would create a company that would rival market leader Vodacom group.

Rain argued a tie-up between it and Telkom would create a more competitive landscape with three large operators in South Africa.

Rain said in a statement: "It is a logical alternative to simply selling to MTN and would also be consistent with the pro-competitive policies of Government”.

Telkom has said it has yet to receive a proposal from rain.

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