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December 26, 2012 8:25 am
The move by South Korea’s largest telephone and internet company by sales represents its second attempt this year to gain a foothold in Africa following its failure in June to buy a 20 per cent stake in South Africa’s state-run Telkom due to opposition from the South African government.
“We submitted a non-binding offer on December 17,” said a KT spokesman, who declined to provide further details.
Vivendi is trying to sell its 53 per cent stake in Maroc Telecom as the French group pushes forward with a strategic review to focus on its media holdings, notably Universal Music Group. Analysts said a deal could be worth as much as €5.5bn. Maroc Telecom is almost a third owned by the kingdom of Morocco.
A shortlist of bidders is expected to be announced next month before a binding bidding process slated for March. KT faces competition from France Telecom, the largest French phone company, Qtel, the telecoms group controlled by Qatar, and Etisalat, the United Arab Emirates-based telecoms rival.
KT has sought to offset stalling domestic growth by expanding abroad, selling IT consulting services and mobile content to operators in emerging markets. It has investments in Mongolian and Uzbekistani operators and has built networks in Rwanda and Congo. But its overseas expansion efforts have been hampered by a lack of experience and limited financial firepower.
“KT has to venture abroad as the domestic telecoms market is already saturated. It is especially interested in emerging markets such as Africa, where it can have additional growth by installing telecoms networks and offering IT consulting services,” said Choi Yun-mee, an analyst at Shinyoung Securities.
“But it remains to be seen whether KT can actually get the deal done, given many political factors in play. And the deal looks too big for KT alone to pursue,” she added.
Concerns over financing the deal weighed on KT shares. The shares fell 1.45 per cent to Won37,500 on Wednesday, while the broader market was little changed.
KT is likely to team up with state-run financial investors such as the National Pension Service and Korea Post for the Moroccan deal. KT set up a Won800bn ($745m) fund with the NPS last year for overseas acquisitions.
KT plans to transform itself from a telecoms carrier to a global media distributor, like Singapore Telecom and PCCW. The company has set a target of deriving 10 per cent of its revenues from overseas in three years; compared with 4 per cent in 2011.
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