France's Vivendi announced today that it is interrupting talks, started some weeks ago, with Zain Group, to acquire a majority stake in its African telecommunications activities.
In a brief statement, Vivendi said that it had applied its usual criteria of profitability and financial discipline to this potential investment in emerging markets, in the best interests of its shareholders.
No reason was given for the break-off of the talks or any hint if they would resume again.
When the talks were confirmed earlier in the month, Vivendi said that it "attaches the utmost importance to keeping its credit rating and its dividend at their current levels and will continue to work in the interests of its shareholders." Recent comments from debt ratings agency, Standard & Poor's may have cooled its ardor after warning that the credit rating could face a downgrade following an investment in Zain.
Zain had recruited Swiss bank UBS to carry out a "strategic review" that could lead to a sale of its former Celtel division--which includes most of its African assets.