July 5, 2006

After weeks of speculation that a deal was in the works for China Mobile to purchase Millicom International Cellular S.A., Millicom declared that it terminated all sales talks.

“Since May 2006, the company has been in prolonged discussions with China Mobile.

Additionally, Millicom said that "Due diligence with one potential purchaser has been completed, but it has now concluded that this buyer will not be in a position within an acceptable timeframe to make a binding offer that is suitably attractive, given the current strong performance of the business, or sufficiently certain of closing," said Millicom in a company statement.

The deal, reportedly worth about $5.3 billion, would have been the largest overseas acquisition by a Chinese company to date. China Mobile is the world’s largest carrier in terms of subscriber numbers.

Millicom said that it had reached its conclusion as a result of a strategic review that began in January.

Then, shortly after it canceled the China Mobile talks, the carrier announced it added 1.4 million subscribers in the second quarter, representing a 15 percent growth from the previous quarter and a 62 percent increase compared to the second quarter of 2005.

Millicom has cellular licenses and operations in 16 countries, mostly developing nations in Asia, Latin America and Africa. The carrier ended the second quarter with 10.9 million subscribers.

Millicom shares were up about 7 percent in midday trading.

Source: RCR News