Orange Said to Mull Bid for Some Millicom Assets in Africa

  • French mobile operator said to expand network in West Africa
  • Millicom seen under pressure to extend coverage to rural areas

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.

Millicom reversed losses to rise as much as 3.8 percent and gained 3.6 percent to 486.90 kronor at 4:05 p.m. in Stockholm. Orange fell 1 percent to 15.43 euros in Paris.

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 landline operator arranged to merge.

“The market clearly wants an exit from Africa for Millicom,” Stefan Gauffin, an analyst at Stockholm-based Nordea Securities, said by phone. “Over the last few years Millicom has not performed that well in Africa, and there has been a negative cash flow from the region.” 

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.

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