MTN ends legal challenge to MTC acquisition of Celtel

On March 29, Kuwaiti operator MTC Group announced the acquisition of an 85% stake in Celtel, with the remaining 15% to be acquired in two years’ time – for a total consideration of US$3.4 billion.

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By  Tawanda Chihota Published  June 12, 2005

South African mobile operator MTN has dropped its legal case against Celtel International shareholders over their acceptance of a US$3.4 billion acquisition offer, having allegedly agreed to sell the company to MTN for US$2.7 billion. On March 29, Kuwaiti operator MTC Group announced the acquisition of an 85% stake in Celtel, with the remaining 15% to be acquired in two years’ time – for a total consideration of US$3.4 billion. “The board has resolved to move on. In the best interests of the company it's not worth spending our energy and time stuck in a court case. We will look for other opportunities,” MTN’s CEO Phuthuma Nhleko commented while reporting the operator’s annual results. Nhleko also commented that the operator did not have any acquisition prospects at the moment despite remaining focused on gaining further footholds across Africa and the Middle East. MTN clearly has the financial clout to pursue further opportunities. It recorded service revenues in the year to end-March amounting to R29 billion (US$4.3 billion) and a net profit of R6.4 billion, representing an annual growth of 21% and 47% respectively. Total subscriber numbers were up 50% year on year to 14.3 million and the operator declared a dividend of 65 cents per share. MTN operates in South Africa, Nigeria, Cameroon, Uganda, Rwanda and Swaziland and its Nigerian operation recorded revenues of R9.3 billion and subscriber growth of 123% to total 4.39 million users at the end of March 2005. Revenue in South Africa rose 17% to R17.8 billion, and despite strong competition from its two competitors, particularly in the prepaid space, the operator counted 8 million subscribers at the end of March. Earlier, MTN's major South African rival Vodacom reported full year net profit of R3.9 billion and 38% growth in subscribers to 15.5 million in South Africa, Tanzania, Lesotho, Mozambique and the Democratic Republic of Congo.

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