Tuesday, March 31, 2009

China Mobile Denies MTN Takeover Claim

­Reports in the media that China Mobile Communications Corp. (CMCC) is seeking a partner for a takeover of South Africa's MTN Group have been denied by the firm. The reports, which first emerged in the South China Morning Post, citing unnamed sources said that the company was seeking to be a junior partner in a takeover attempt.

The Chinese carrier is “not aware” of the investment plans reported by the newspaper, Rainie Lei, a spokeswoman for Hong Kong-listed China Mobile Ltd. told Bloomberg News.

The original news report had said that China Mobile had approached or plans to approach companies with a strong African and Middle Eastern presence such as France Telecom; Zain, Orascom Telecom and Etisalat.

It is possible that CMCC is looking at a purchase without using its Hong Kong listed subsidiary, and while this would be highly unusual, it would resolve a key reason given for MTN wishing to sell some of its overseas operations. MTN has subsidiaries in Iran, Syria and Sudan - all countries which the US has trade sanctions against and MTN's involvement in those countries could be causing difficulties in securing US investors. While the listed arm, China Mobile Hong Kong would face the same problems with the US government, the state-controlled parent group, China Mobile Communications would usually have no such qualms.

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