October 20, 2007
Hunt for deals takes Singtel to Africa
Singapore Telecommunications is now hunting for high-growth assets far beyond its traditional grounds in Asia, having spent over $12 billion in acquisitions closer to home in recent years.
Banking sources told Reuters that SingTel, Southeast Asia's largest telecoms company, plans to bid for a majority stake in state-owned Ghana Telecom, the West African country's dominant operator.
The deal, for half of the unlisted company's shares, may cost SingTel up to $500 million and pit it against European names like France Telecom , whose mobile arm Orange operates in several African countries, including Botswana and Senegal.
SingTel declined to comment but people close to the deal confirmed that the company, advised by Merrill Lynch, was conducting due diligence and hopes to be short-listed for the bidding process likely to start in about a weeks time.
A telecoms firm in Africa -- where only 15 percent of the population owned a mobile phone at the end of 2005 -- would fit well with SingTel's strategy to invest in low-penetration markets for hyper growth, analysts said.
If the deal goes through, it would be the first major acquisition by a Singaporean company in Africa. But not everyone is convinced that an African adventure is a good idea.
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