French telecom group, Orange has announced the impending acquisition of Tigo DRC, a subsidiary of Luxembourg telecom operator Millicom, which operates in Africa and Latin America under the brand “Tigo”. The amount of the transaction is worth US$ 160 million in cash.
The acquisition (still subject to approval by relevant Congolese authorities) will bring the total number of countries Orange operates in Africa to 20 including the recent acquisition of Cellcom in Liberia and agreement with Bharti Airtel to resume operations in Burkina Faso and Sierra Leone.
Tigo will not entirely be leaving Africa as their services are still available in Ghana, Senegal, Chad, Rwanda and Tanzania.
Commenting on the withdrawal from the Democratic Republic of Congo (DRC), the CEO of Millicom, Mauricio Ramos said;
“The sale of Tigo DRC is consistent with our strategy to participate in the consolidation and to focus our resources on the most promising markets. The proceeds will strengthen our balance sheet, enabling us to reinvest in our existing markets of Latin America and Africa, thus improving our earnings and cash flow.”
Despite the presence of six telecom operators – Airtel, Africell, Orange, Tigo, Vodacom and Yozma Timeturns, DR Congo is still the second largest African telecom market in Central and West Africa after Nigeria, with nearly 40 million subscribers. After the approval, the acquisition will see the market share of Orange rise to 26% however that is still behind those of market leaders – Vodacom (33%) and Airtel (32%).