Orange SA started informal talks with Millicom International Cellular SA to buy some of the emerging-market focused company’s operations in Africa, according to two people familiar with the matter.
The French mobile company is considering buying Millicom’s operations in Senegal, Ghana and Chad, the people said, who asked not to be identified as the negotiations aren’t public. Orange is also looking for new opportunities in East Africa after agreeing to sell its 70 percent stake in Telkom Kenya to Helios Investments Ltd. in November, one of the people said.
An Orange spokeswoman didn’t immediately comment when contacted by phone. Millicom doesn’t “comment on rumors and speculation,” said spokeswoman Tabitha Aldrich-Smith.
A deal with Millicom will help to give new momentum to Orange’s growth ambitions after a $11.2 billion proposed takeover of French rival Bouygues SA’s phone business faltered in April. In February, Millicom agreed to sell Orange its assets in the Democratic Republic of Congo for $160 million while the Paris-based group and Ivory Coast’s land-line operator arranged to merge.
Millicom is looking to discard its assets in West and Central Africa, said two people familiar with the matter, including one who spoke about Orange’s interest.
The company has come under increasing pressure from regulators to extend its network from urban centers to rural areas where it lags other providers, one of the people said. Millicom will probably seek to maintain its networks in East Africa, where it operates in Tanzania and Rwanda, the person said.
Only existing providers in West Africa will probably buy Millicom’s assets in the region because the market is saturated, the person said. Orange already operates in a number of countries in West Africa including Ivory Coast, Cameroon and Senegal, it said on its website.