Orange and Airtel are currently holding talks regarding the “possible acquisition” by Orange of four of Airtel’s African units.
Orange recently revealed that it aims to strengthen its position in both Africa and the Middle East, growing its existing businesses there while also expanding into new markets via the creation of a new holding company to “attract new investors and strategic partners”.
While a statement from Orange noted that there was “no certainty of any binding agreement as a result of these discussions”, they confirmed that with regard to a deal, the company “hopes to conclude due diligence and reach an agreement in Q4 2015”.
The four Airtel markets under consideration are Burkina Faso, Chad, Congo Brazzaville and Sierra Leone, all of which are francophone countries. In this regard, they all “naturally complement Orange’s presence in this region of Africa”, according to a source at the French group. While Orange is established in 10 countries across West Africa, it has no direct holdings in any of the four Airtel markets in question.
“This proposed acquisition is perfectly aligned with Orange’s strategy to continue growing in Africa and we believe that the acquisition of these four operators present a real interest for Orange,” noted the operator.
All four of the Airtel units hold the position of number one or number two in their market, boasting a combined 9 million subscribers with a €600 million annual turnover. However, Airtel has faltered since it entered the African market in 2010 and is steadily reducing its presence there. In addition to these four units, it has sold $1.3 billion worth of tower infrastructure to specialist companies in the region.
However, a recent Airtel statement assessing its results noted that it “continues to believe in the demographic and economic potential of Africa. We carefully calibrate our investments to ensure that we are uniquely positioned to capitalize on the Africa growth story playing itself out on voice and data, as well as the mobile money boom”.
