South African mobile operator MTN Group Ltd (MTNJ.J)is in talks to buy smaller rival Telkom (TKGJ.J) for a stock or a cash-and-stock deal, the two companies said on Friday, 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.
Telkom’s shares jumped nearly 30% following the announcement, while MTN was up nearly 5%.
The deal between MTN and Telkom, if successful, would bolster MTN in its competition against Vodacom Group (VODJ.J), 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.