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$160 million deal to almost double Orange DRC’s subscriber base.
Orange on Monday agreed to acquire Millicom’s Tigo unit in the Democratic Republic of the Congo (DRC) for US$160 million.
The all-cash deal will almost double the French incumbent’s mobile subscriber base there. At the end of the third quarter, Orange DRC had 5.28 million customers, while Tigo says it has just over 5 million.
The acquisition should help Orange mount a stronger challenge to market leader Vodacom, which has 11.8 million active mobile customers in the DRC.
"Through this deal, Orange would reinforce significantly its presence in the DRC, hence becoming one of the leading mobile operators in the country and will create positive synergies," said Orange, in a statement. "This acquisition underlines Orange’s strategy in Africa which aims at developing and maintaining leading competitive positions across its various countries of operations on the continent."
As for Millicom, the Luxembourg-based telco group said the sale is in line with its strategy of focusing on its strongest markets.
"Proceeds from the sale will strengthen our balance sheet allowing us to reinvest in our existing Latin American and African markets, improving earnings and cash flow and reducing leverage," said Mauricio Ramos, CEO of Millicom.
Closing the deal requires regulatory approval from the relevant authorities; neither Orange nor Millicom said when they expect it to complete.
