Korea Telecom is bidding for Vivendi’s controlling stake in Maroc Telecom, the largest operator in Morocco, according to a story in the Financial Times newspaper.
The South Korean operator joins other high-profile bidders including France Telecom, Qatar Telecom and Etisalat (Abu Dhabi, United Arab Emirates) as it tries to increase its exposure to emerging economies and offset a slowdown in its mature domestic market.
Korea Telecom (Seoul, South Korea) aims to generate 10% of its total revenues from overseas activities in the next three years, up from just 4% last year.
Meanwhile, French conglomerate Vivendi (Paris, France) is keen to offload some of its telecoms interests and focus resources on its core media business.
According to analysts cited by the Financial Times, the sale of Vivendi’s 53% stake could fetch as much as $5.5 billion, but the deal would need the support of the kingdom of Morocco, which owns about a third of Maroc Telecom (Rabat, Morocco).
Earlier this year, Korea Telecom tried to build a presence in Africa with a move for a 20% stake in South Africa’s Telkom, but its approach ran into opposition from the South African government.
The operator has rolled out networks in Rwanda and Congo but lacks any investments in the continent’s bigger and more affluent markets.
Analysts say Korea Telecom may need to pair up with another interested party to stand any chance of buying into Morocco, given its rather limited financial resources.
A partnership option may be one of South Korea’s state-owned investment groups, such as the National Pension Service (NPS).
Indeed, last year Korea Telecom and the NPS set up a fund worth $745 million for the purpose of making foreign investments.
Markets reacted negatively to the news of Korea Telecom’s move, sending the company’s share price down by 1.45% on Wednesday.