MTN Group has started talks to acquire Visafone Communications to solidify its grip in the telecommunications market in Nigeria. According sources, the deal is being negotiated for about $100 million.
The wireless-network operator, Visafone, which set up eight years ago to deliver voice and broadband services through mobile and fixed telecom platforms after business tycoon Jim Ovia, who also founded Zenith Bank, acquired three operators has in the past few years been faced with industry challenges and dominance of Global System for Mobile communications (GSM) operators.
On how the discussion for the acquisition would take, a source close to the deal said: “The deal is done. We’re almost putting ink to paper,” while another source said the talks would conclude “very soon”.
Both sources did not say how much MTN would spend on the purchase and how big a stake in Visafone it would take up. However, another source revealed that it would hit about $100 million.
Speaking with Hallmark, the corporate service Executive in MTN Nigeria, Akinwale Goodluck, debunked the reports of the deal and the stated amount. “It is true we are looking for expansion. But all that is being currently reported are mere rumours,” he said.
Attempts made to speak with the Head Corporate Communications of Visafone, Joseph Ushigiale, proved abortive, as there was no response from his phone.
However, MTN Group spokesman Chris Maroleng said the company did not comment on market speculation.
Visafone Communications Ltd was born out of the strategic acquisition of 3 CDMA mobile network operators that had been in operation for up to 8 years with 30,000 subscribers and coverage in different parts of Nigeria.
The company, which was incorporated in Nigeria on June 20, 2007 following the acquisition of Cellcom received its Unified Access Service Licence as a telecom operator from the Nigerian Communications Commission (NCC) on August 1, 2007 positioned it to offer mobile, fixed and any other telecommunications service to its subscribers.