MTN of South Africa is reportedly in talks with Orascom Telecom about buying the Cairo-based company's African mobile phone businesses.
The talks started out as discussions about MTN buying Orascom's Algerian mobile operator but are now said to have expanded to include most of its African businesses.
Although no deal has yet been agreed, an announcement could come as early as next week.
Eager to add new markets to its 21 businesses across the Middle East and Africa, MTN is said to be considering most of Orascom's African assets, including those in Algeria, Tunisia, Burundi, Central African Republic, Namibia and Zimbabwe.
MTN is not believed however, to want Orascom's minority stake in Egypt's leading mobile operator, ECMS.
Djezzy, Orascom's Algerian business, is its African asset generating the most profits. Algeria is a lucrative market, with penetration rates at about 70 per cent, according to analysts.
However, Orascom has been said to be keen to sell Djezzy after it received a $597 million tax bill from the government last year, which ultimately affected its fourth quarter results for 2009. The company reported group revenue of $5.1 billion for 2009, down five per cent compared with 2008. Pre-tax profit fell 18 per cent to $740.3 million.
Orascom also has operations in North Korea, Bangladesh and Pakistan.
MTN is the largest mobile operator in Africa, where competition in the sector is intensifying. Last month, Bharti Airtel, India's largest mobile operator, signed a $10.7 billion deal to buy the African businesses of Zain, the Kuwaiti telecoms company.
Last year, the UKÔÇÖs Vodafone signed a deal to secure control of Vodacom, South Africa's largest mobile operator.
MTN's move on Orascom, which has a market capitalisation of $7 billion, is part of an ongoing acquisition strategy following its three failed attempts to combine with Indian mobile operatorsÔÇöincluding Bharti, with whom it held two rounds of merger talks which ultimately collapsed. That deal would have valued at $23 billion, and would have created the worldÔÇÖs third-largest mobile phone company by subscribers.
MTN also held talks in 2008 with Reliance Communications, India's second largest mobile operator.
MTN is said to have approached banks for $5 billion to help fund the acquisition.
