South Africa’s Telkom in takeover talks with mobile carrier Cell C

South African telecoms giant Telkom SA has announced it is in talks with rival firm Cell C regarding a takeover of the country’s third largest mobile carrier.

While part state-owned Telkom has previously considered acquiring its competitor, which is saddled with hefty debts, the company said it would only complete the deal if Cell C make a number of changes.

“The potential acquisition will be subject to Cell C completing a financial restructuring to ensure that its gearing levels are reduced to a sustainable level as specified by Telkom,” it said in a statement today.

Telkom stated it would require Cell C to renegotiate a number of contractual relationships to terms it finds acceptable, adding that while due diligence was largely concluded, discussions were preliminary and any takeover would be subject to regulatory approvals.

In a separate statement, Cell C confirmed that it had received a non-binding offer from Telkom, but said it ‘remains focused’ on its turnaround including driving efficiencies, restructuring its balance sheet and improving liquidity.