The merger discussion had started in September when Telkom, the third largest telcos received a non-binding proposal from Rain which would have made the two telecommunication companies a strong force in a market largely dominated by MTN and Vodacom.
However, both companies have now come out to say “after initial discussions, but prior to any due diligence, the parties have decided that a suitable transaction is not possible at this time”.
According to South Africa’s Takeover Regulation Panel (TRP), Rain’s move was a bit sketchy as there were several errors in the procedure of Rain’s approach to Telkom after it had allegedly drawn plans of a possible merger without seeking the approval of Telkom, to which Telkom respond that no offer or proposal had been received initially.
Rain made this approach after MTN proposed a merger with Telkom for cash or cash and share but withdrew its proposal following the news of Rain’s approach to Telkom.
Rain, the 5G network, which focuses on data and IoT is now isolated, and South African observers are wondering what MTN’s next move would be, would it resume its talk with Telkom which it opted out of last December because it wanted exclusive discussions.